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

Required:
1. Assume F&S offers a deal whereby enrollingin a new membership for $1,300 provides a year of unlimited accessto facilities and also entitles the member to receive a voucherredeemable for 20% off yoga classes for one year. The yoga classesare offered to gym members as well as to the general public. A newmembership normally sells for $1,470, and a one-year enrollment inyoga classes sells for an additional $750. F&S estimates thatapproximately 40% of the vouchers will be redeemed. F&S offersa 10% discount on all one-year enrollments in classes as part ofits normal promotion strategy.
a. & b. Indicate below whether each item is aseparate performance obligation. For each separate performanceobligation you have indicated, allocate a portion of the contractprice.
c. Prepare the journal entry to recognize revenuefor the sale of a new membership.
2. Assume F&S offers a “Fit 60” coupon bookwith 60 prepaid visits over the next year. F&S has learned thatFit 60 purchasers make an average of 50 visits before the couponbook expires. A customer purchases a Fit 60 book by paying $750 inadvance, and for any additional visits over 60 during the yearafter the book is purchased, the customer can pay a $15 visitationfee per visit. F&S typically charges $15 to nonmembers who usethe facilities for a single day.
a. & b. Indicate below whether each item is aseparate performance obligation. For each separate performanceobligation you have indicated, allocate a portion of the contractprice.
c. Prepare the journal entry to recognize revenuefor the sale of a new Fit 60 book.

Req 1A and 1B

Indicate below whether each item is a separate performanceobligation. For each separate performance obligation you haveindicated, allocate a portion of the contract price.

	Item Description Performance Obligations? Stand Alone Prices Percentage of Total Stand AlonePrices Yoga discount voucher Gym membership Total stand alone price Item Description Percentage of Total Stand AlonePrice Total Transaction Price Allocated Contract Price Yoga discount voucher Gym membership Total contract price

Req 1C

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

Note: Enter debits before credits.

	Transaction General Journal Debit Credit 1

Indicate below whether each item is a separate performanceobligation. For each separate performance obligation you haveindicated, allocate a portion of the contract price.

Req 2A and 2B

• Record the revenue for the sale of a new Fit 60 book.

Note: Enter debits before credits.

	Item description Performance Obligations? Stand Alone Prices Percentage of Total Stand AlonePrices Fit 60 Additional gym visits Total stand alone price Item description Percentage of Total Stand AlonePrice Total Transaction Price Allocated Contract Price Fit 60 Additional gym visits Total contract price

• 
  Record the revenue for the sale of a new Fit 60 book.

Note: Enter debits before credits.

Req 2C

	Transaction General Journal Debit Credit 1