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 $1,100 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 $1,200, and a one-year enrollment in yoga classes sells for an additional $500. 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.

	Item Description Performance Obligation? Stand Alone Prices Percentage of Total Stand Alone Prices Yoga discount voucher 0 Facilities access 0 Total stand alone price $0 0% Item Description Percentage of Total Stand Alone Price Total Transaction Price Allocated Contract Price Yoga discount voucher $0 Facilities access $0 Total contract price $0

c. Prepare the journal entry to recognize revenue for the sale of a new membership.

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

	Transaction General Journal Debit Credit 1

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 $500 in advance, and for any additional visits over 70 during the year after the book is purchased, the customer can pay a $20 visitation fee per visit. F&S typically charges $20 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.

	Item description Performance Obligation? Stand Alone Prices Percentage of Total Stand Alone Prices Fit 70 0 Additional gym visits 0 Total stand alone price $0 0% Item description Percentage of Total Stand Alone Price Total Transaction Price Allocated Contract Price Fit 70 $0 Additional gym visits $0 Total contract price $0

c. Prepare the journal entry to recognize revenue for the sale of a new Fit 70 book.

• Record the revenue for the sale of a new Fit 70 book.

	Transaction General Journal Debit Credit 1