Fit & Slim (F&S) is a health club that offers members various gym services. ...
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Accounting
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.
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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