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 $1,500 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 $1,560, and a one-year enrollment in yoga classes sells for an additional $650. 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. 2. Assume F&S offers a Fit 70" coupon book with 70 prepaid visits over the next year. F&S has learned that Fit 70 purchasers make an average of 60 visits before the coupon book expires. A customer purchases a Fit 70 book by paying $650 in advance, and for any additional visits over 70 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 70 book. Complete this question by entering your answers in the tabs below. Reg 1A and 1B Req 10 Reg 2A and 2B Req 20 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 Yoga discount voucher Facilities access Total stand alone price Item Description Percentage of Total Stand Alone Price Total Transaction Price Allocated Contract Price Yoga discount voucher Facilities access Total contract price Req 1A and 1B Req 1C Reg 2A and 2B Req 20 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 Journal entry worksheet Record the revenue for the sale of a new membership. Note: Enter debits before credits. General Journal Debit Credit Transaction 1 Reg 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 Performance Obligation? Stand Alone Prices Percentage of Total Stand Alone Prices Fit 70 Additional gym visits Total stand alone price Item description Percentage of Total Stand Alone Price Total Transaction Price Allocated Contract Price Fit 70 Additional gym visits Total contract price Reg 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 70 book. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet
