Fit & Slim (F&S) is a health club that offers members various gym services. Required: 1. Assume F&S offers a deal whereby enrolling in a new membership for $700 provides a year of unlimited access to facilities and also entitles the member to receive a voucher redeemable for 25% off yoga classes for one year. The yoga classes are offered to gym members as well as to the general public. A new membership normally sells for $720, and a one-year enrollment in yoga classes sells for an additional $500. F&S estimates that approximately 40% of the vouchers will be redeemed. F&S offers a 10% discount on all one. year enrollments in classes as part of its normal promotion strategy. 1. a. & b. Indicate below whether each item is a separate performance obligation. For each separate performance obligation you have indicated, allocate a portion of the contract price c. Prepare the journal entry to recognize revenue for the sale of a new membership 2. Assume F&S offers a "Fit 50" coupon book with 50 prepaid visits over the next year. F&S has learned that Fit 50 purchasers make an average of 40 visits before the coupon book expires. A customer purchases a Fit 50 book by paying $500 in advance, and for any additional visits over 50 during the year after the book is purchased, the customer can pay a $15 visitation fee per visit. F&S typically charges $15 to nonmembers who use the facilities for a single day a. & b. Indicate below whether each item is a separate performance obligation. For each separate performance obligation you have indicated, allocate a portion of the contract price c. Prepare the journal entry to recognize revenue for the sale of a new Fit 50 book Req 1A and 1B Req 1C Req 2A and 2B Req 2C Prepare the journal entry to recognize revenue for the sale of a new membership. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Transaction General Journal 1 Cash Deferred revenue Deferred revenue coupons < Req 1A and 1B Req 2A and 2B > Debit Credit 750 720 30 Req 1A and 1B Req 1C Req 2A and 2B Req 2C Indicate below whether each item is a separate performance obligation. For each separate performance obligation you have indicated, allocate a portion of the contract price. Item Description Fit 50 Additional gym visits Total stand alone price Item Description Fit 50 Additional gym visits Total contract price Performance Obligation? Stand Alone Prices Percentage of Total Stand Alone Prices Yes 500 97% No S 15 3% $ 515 100% Percentage of Total Stand Total Transaction Price Allocated Contract Price Alone Price 97% x $ 515 $ 3% x $ 515 $ $ 500 15 515 Req 1A and 1B Req 1C Req 2A and 2B Req 2C Prepare the journal entry to recognize revenue for the sale of a new Fit 50 book. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Transaction General Journal Cash Deferred revenue