Problem 5-1 Upfront fees; performance obligations [LO5-4, 5-5] 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 $1,900 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 $1,940, and a one-year enrollment in yoga classes sells for an additional $600. 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. 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 60" coupon book with 60 prepaid visits over the next year. F&S has learned that Fit 60 purchasers make an average of 50 visits before the coupon book expires. A customer purchases a Fit 60 book by paying $600 in advance, and for any additional visits over 60 during the year after the book is purchased, the customer can pay a $10 visitation fee per visit. F&S typically charges $10 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 60 book