River Yoga studio offers annual $200 memberships that entitle members to unlimited use of all classes and
Question:
River Yoga studio offers annual $200 memberships that entitle members to unlimited use of all classes and locker rooms. The member signs a contract at the start of membership. Each new membership also entitles the member to receive a coupon for 30% off a $150 message services offered at the studio. The company estimates that approximately 80% of the coupons will be redeemed, and that if the coupons weren’t redeemed, the message would still be discounted by 10% because of ongoing promotions for all customers as the studio builds their clientele.
The company sold 30 memberships on January 3, 2021. Also assume that the standalone price of the membership is $200. Document steps 1,2,3,4 and 5 below. You must identify/list the name of each step and all work must be shown. (Do not round percentages and round dollar amounts to nearest penny.)
What I have
Step 1: Yes there is a contract
Step 2: 2 performance obligations
Step 3: Determine transaction price
$200
Step 4: Allocate transaction price? (need help here)
Step 5 - Record the journal entry for River Yoga assuming 10 memberships are sold on January 3, 2021. Most customers pay in cash (60%) and the other customers have 30 days to pay.
