Reference no: EM132952782

Problem 1: Chris Health Club enters into a contract on January 1, 20x8 with customers for one year access to gym, swimming pool and tennis courts for P120,000 per year. Chris also charges a P18,000 nonrefundable initiation fee to compensate for the administrative tasks to register the customer. How many performance obligations exist in the contract?

a. 0

b. 2

c. 1

d. 3

Problem 2: The total transaction price of this arrangement - non-refundable upfront fee should be:

a. None

b. P600,000

c. P18,000

d. P618,000

Problem 3: On January 2, 20x8 (time of sale/point in time), the recognize revenue amounted to:

a. None

b. P 18,000

c. P11,500

d. P138,000

Problem 4: On December 31, 20x8, the recognize revenue amounted to:

a. P11,500

b. P120,000

c. P18,000

d. P138,000

Problem 5: Assume, however, that Chris allows customers to renew their membership without having to pay another initiation fee upon renewal. Further, Chris determines that its customers, on average, remain members for 5 years, the recognize revenue for 20x8 amounted to:

a. P 18,000

b. P123,600

c. P100,000

d. P618,000