Reference no: EM132866440

Question - Fit for Life is a newly established gym and fitness centre in St. John's, Newfoundland. It is owned by Muhammad Fikri, a local physiotherapist. The business is set to open at the end of the month. As Muhammad does not have a background in accounting, he has asked Remi Steele, a local CPA, to advise him on how revenue should be recorded for the business. With Remi's guidance, Fit for Life has elected to report its financial results using ASPE. Muhammad provided the following information to Remi to assist with the analysis:

Fit for Life customers can choose from one of three options when selecting their membership options:

1 - Fitness bundle - For $1,200 paid in advance, new members receive an annual gym membership and 10 one-hour sessions with a fitness trainer. Fit for Life expects most customers to use one session with a trainer per month, until they are all used.

2 - Access only - If customers prefer, they can purchase an annual membership for $1,050.

3 - Pay as you go - If customers do not want to sign one-year contract, they can opt for a monthly membership of $95, and purchase sessions with a fitness trainer as needed for an additional $35 per session.

Required -

Q1 - How to record one month's worth of revenue for the fitness bundle membership - gym membership portion.

Q2 - How to record one month's worth of revenue for the fitness bundle membership - fitness trainer session portion.