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