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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

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 $1,300 provides a year of unlimited access to facilities and also entitles the member to receive a voucher redeemable for 30% 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 $1,320, and a one-year enrollment in yoga classes sells for an additional $550. F&S estimates that approximately 50% 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.

Item Description Performance Obligation? Stand Alone Prices Percentage of Total Stand Alone Prices
Yoga discount voucher 0
Facilities access 0
Total stand alone price $0 0%
Item Description Percentage of Total Stand Alone Price Total Transaction Price Allocated Contract Price
Yoga discount voucher $0
Facilities access $0
Total contract price $0

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.)

Journal entry worksheet

  • Record the revenue for the sale of a new membership.

Note: Enter debits before credits.

Transaction General Journal Debit Credit
1

2. Assume F&S offers a Fit 80 coupon book with 80 prepaid visits over the next year. F&S has learned that Fit 80 purchasers make an average of 70 visits before the coupon book expires. A customer purchases a Fit 80 book by paying $550 in advance, and for any additional visits over 80 during the year after the book is purchased, the customer can pay a $25 visitation fee per visit. F&S typically charges $25 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 80 book.

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 Performance Obligation? Stand Alone Prices Percentage of Total Stand Alone Prices
Fit 80 0
Additional gym visits 0
Total stand alone price $0 0%
Item description Percentage of Total Stand Alone Price Total Transaction Price Allocated Contract Price
Fit 80 $0
Additional gym visits $0
Total contract price $0

Prepare the journal entry to recognize revenue for the sale of a new Fit 80 book. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

  • Record the revenue for the sale of a new Fit 80 book.
  • Transaction General Journal Debit Credit
    1

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