Required:1. Assume F&S offers a deal whereby enrolling in a new membership for $1,900 provides a year of unlimited access to facilities andalso entitles the member to receive a voucher redeemable for 30% off yoga classes for one year. The yoga classes are offered togym members as well as to the general public. A new membership normally sells for $1,940, and a one-year enrollment in yogaclasses sells for an additional $600. 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.a. & b. Indicate below whether each item is a separate performance obligation. For each separate performance obligation youhave 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 60" coupon book with 60 prepaid visits over the next year. F&S has learned that Fit 60 purchasersmake an average of 50 visits before the coupon book expires. A customer purchases a Fit 60 book by paying $600 in advance,and for any additional visits over 60 during the year after the book is purchased, the customer can pay a $10 visitation fee pervisit. F&S typically charges $10 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 youhave indicated, allocate a portion of the contract price.c. Prepare the journal entry to recognize revenue for the sale of a new Fit 60 book.Complete this question by entering your answers in the tabs below.Req 1A and 1BReq 1CReq 2A and 2B Req 2CIndicate below whether each item is a separate performance obligation. For each separate performance obligation you haveindicated, allocate a portion of the contract price.Item DescriptionYoga discount voucherFacilities accessTotal stand alone pricePerformanceObligation?Stand Alone PricesPercentage of TotalStand Alone PricesItem DescriptionPercentage ofTotal StandTotal TransactionPriceAllocated ContractPriceAlone PriceYoga discount voucherFacilities access

Revenue Recognition means the recording of revenues of an entity in its books. It is an accrual…

1. Assume F&S offers a deal whereby enrolling in a new membership for $1,900 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 $1,940, and a one-year enrollment in yoga classes sells for an additional $600. 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. 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.

1. Assume F&S offers a deal whereby enrolling in a new membership for $1,900 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 $1,940, and a one-year enrollment in yoga classes sells for an additional $600. 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. 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.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter16: Tax Research

Section: Chapter Questions

Problem 78AM

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1. Assume F&S offers a deal whereby enrolling in a new membership for $700 provides a year of unlimitedaccess to facilities and also entitles the member to receive a voucher redeemable for 25% off yoga classes forone year. The yoga classes are offered to gym members as well as to the general public. A new membershipnormally sells for $720, and a one-year enrollment in yoga classes sells for an additional $500. F&S estimatesthat 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.a. How many performance obligations are included in the new member deal?b. How much of the contract price would be allocated to each performance obligation? Explain your answer.c. Prepare the journal entry to recognize revenue for the sale of a new membership. Clearly identify revenueor deferred revenue associated with each performance obligation.
Required:1. Assume F&S offers a deal whereby enrolling in a new membership for $1,500 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 $1,560, and a one-year enrollment in yoga classes sells for an additional $650. 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. Need Parts Req 1A&1b, Req 1c 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.
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. 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…
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 $1,300 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 $1,470, and a one-year enrollment in yoga classes sells for an additional $400. 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.c. Prepare the journal entry to recognize revenue for the sale of a new membership.2. Assume F&S offers a…
Fit & Slim (F&S) is a health club that offers members various gym services. Required: Assume F&S offers a deal whereby enrolling in a new membership for $1,250 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 $1,320, and a one-year enrollment in yoga classes sells for an additional $550. 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. 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. Assume F&S offers a “Fit…
On January 1, 2030, ABC granted a 3 year franchise contract with XYZ. The terms of the contract are that ABC is required to pay a non-refundable initiation gee of P7,200 and a membership fee of P1,800 per month. XYZ determine that its customers on average, renew their annual membership two times before terminating their membership. Case 1: How many performance obligations exists in the contract for membership fee agreement? a. 0 b. 1 c. 2 d. 3 Case 2: The transaction price of this arrangement-non refundable upfront fee should be a. 0 b. 7,200 c. 64,800 d. 72,000 Case 3: What is the revenue per year? a. 7,200 b. 10,000 c. 12,600 d. 24,000
On January 1, 2030, ABC granted a 3 year franchise contract with XYZ. The terms of the contract are that ABC is required to pay a non-refundable initiation gee of P7,200 and a membership fee of P1,800 per month. XYZ determine that its customers on average, renew their annual membership two times before terminating their membership. How many performance obligations exists in the contract for membership fee agreement?
Consider the following independent situations: For each of these situations, describe the revenue recognition policy that you believe that they should follow, explaining the basis for your recommendation 1. An international health club sells lifetime memberships costing $1,500 which allow the purchaser unlimited use of any of the club's 300 facilities around the world. The initiation fee may be paid in 36 monthly installments, with a two percent interest charge on any unpaid balance. 2. Franklin Motors, Inc., has always offered a limited, 36-month warranty on its cars and trucks, but to counter the significant competition in the industry, the company has come to the conclusion that it must do something more. With that in mind, the company developed a new warranty program: For a $1,500 payment at the time of purchase, a customer can buy a seven-year warranty that will cover replacement of almost all parts and labor. The purchased warranty expires at the end of seven years or when the…
Pina Universe charges an initial franchise fee of $ 234,000. Upon the signing of the agreement, a payment of $ 26,000 is due. Thereafter, 5 annual payments of $ 41,600 are required. The credit rating of the franchisee is such that it would have to pay interest at 9% to borrow money. The franchise agreement is signed on August 1, 2020, and the franchise commences operation on October 1, 2020. Prepare the journal entries in 2020 for the franchisor under the following assumptions. a. No future services are required by the franchisee once the franchise starts operations. b. The franchisor has substantial services to perform, once the franchise begins operations, to maintain the value of the franchise. c. The total franchise fee includes training services (with a value of $ 6,900) for the period leading up to the franchise opening and for 2 months following opening
Assume the following scenarios.Scenario 1: During 2021, The Hubbard Group provides services of $900,000 for repair of a state highway. The company receives an initial payment of $300,000 with the balance to be received the following year.Scenario 2: Rolling Stone magazine typically charges $80 for a one-year subscription. On January 1, 2021, Herman, age 72, purchases a one-year subscription to the magazine and receives a 15% senior citizen discount.Scenario 3: During 2021, Waste Management provides services on account for $30,000. The customer pays for those services in 2022.Scenario 4: During 2021, Sysco Corporation sells grocery items to one of its customers for $260,000 on account. Cash collections on those sales are $180,000 in 2021 and $60,000 in 2022. The remaining $20,000 is written off as uncollectible in 2022.Required: For each scenario, calculate the amount of revenue to be recognized in 2021.
Campus Cellular provides cell phones and 1 year of cell serviceto students for an upfront, nonrefundable fee of $300 anda usage fee of $5 per month. Students may renew the servicefor each year they are on campus (on average, students renewtheir service one time). What amount of revenue shouldCampus Cellular recognize in the first year of the contract?
2. Assume F&S offers a “Fit 50” coupon book with 50 prepaid visits over the next year. F&S has learned thatFit 50 purchasers make an average of 40 visits before the coupon book expires. A customer purchases a Fit50 book by paying $500 in advance, and for any additional visits over 50 during the year after the book ispurchased, the customer can pay a $15 visitation fee per visit. F&S typically charges $15 to nonmembers whouse the facilities for a single day.a. How many separate performance obligations are included in the Fit 50 member deal? Explain your answer.b. How much of the contract price would be allocated to each separate performance obligation? Explain youranswer.c. Prepare the journal entry to recognize revenue for the sale of a new Fit 50 book.