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. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No Transaction General Journal Debit Credit < Previous Req 2A and 2B > 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 Yoga discount voucher Facilities access Total stand alone price Item Description Yoga discount voucher Facilities access Total contract price Performance Obligation? Percentage of Total Stand Alone Prices Stand Alone Prices Yes Yes $ 980 Percentage of Total Stand Alone Price Total Transaction Price Allocated Contract Price < Previous Next >
Fit & Slim (F&S) is a health club that offers members various gym services.
Required:
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Assume F&S offers a deal whereby enrolling in a new membership for $950 provides a year of unlimited access to facilities and also entitles the member to receive a voucher redeemable for 20% 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 $980, 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.
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.
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Assume F&S offers a “Fit 40” coupon book with 40 prepaid visits over the next year. F&S has learned that Fit 40 purchasers make an average of 30 visits before the coupon book expires. A customer purchases a Fit 40 book by paying $500 in advance, and for any additional visits over 40 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 40 book.
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