Problem 5-1 Upfront fees; performance obligations [LO5-4, 5-5] 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 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. c. Prepare the journal entry to recognize revenue for the sale of a new membership 2. Assume F&S offers a "Fit 50" coupon book with 50 prepaid visits over the next year F&S has learned that Fit 50 purchasers make an average of 40 visits before the coupon book expires. A customer purchases a Fit 50 book by paying $500 in advance, and for any additional visits over 50 during the year after the book is purchased the customer can pay a $15 visitation fee per visit F&S typically charges $15 to nonmembers who use the facilities for a single day o. & 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 50 book