Question: Below are the footnotes to Barnes & Noble Inc.'s 2012 annual report and membership information obtained from its Website: The Barnes & Noble Member

Below are the footnotes to Barnes & Noble Inc.'s 2012 annual report

Below are the footnotes to Barnes & Noble Inc.'s 2012 annual report and membership information obtained from its Website: The Barnes & Noble Member Program offers members greater discounts and other benefits for prod- ucts and services, as well as exclusive offers and promotions via e-mail or direct mail for an annual fee of $25.00, which is non-refundable after the first 30 days. Revenue is recognized over the twelve- month period based upon historical spending pattems for Barnes & Noble Members. The Bames & Noble Member Program entitles Members to the following benefits: 40% off the list price of the current hardcover Bames & Noble Store Bestsellers. 10% off the marked Barnes & Noble sale price of other eligible items. Free Express Shipping. Periodic special promotions at Bames & Noble Stores and at BN.com. . a. Explain in layman's terms how Barnes & Noble accounts for the cash received for its membership program. When does Barnes & Noble record revenue from this program? b. How does Barnes & Noble's balance sheet reflect those membership fees? Does the 40% discount affect Barnes & Noble's income statement when membership fees are received?

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