ASSIGNMENT 3 2025
UNIQUE NO. 651535
DUE DATE: 8 AUGUST 2025
,Automation and data analysis
Question 1 (a)
FISHBONE DIAGRAM: Membership Decline Causes at FitNation Gym
┌─────────────────────┐
│ Marketing │
│ - Poor social media │
│ - Unappealing ads │
└─────────────────────┘
/
/
┌────────────┐ ┌────────────┐ ┌────────────┐
┌────────────┐
│ Facilities │ │ Operations │ │ Group Fit │ │
Marketing │
│ & Maint. │ │ & Staffing │ │ Experience │ │
│
└────────────┘ └────────────┘ └────────────┘
└────────────┘
| | |
|
- Dirty/change rooms - Lack of childcare - Missing instructors -
Social media decline
- Key access issues - No staff replacement - Last-minute changes -
Campaign fatigue
\ \
\
\ \
\
\ \
\
⬅⬅⬅ Membership Decline ➡➡➡
, Question 2 (a)
In terms of IFRS 15, the following distinct performance obligations are
identified in the 24-month GymStarter contract:
1. Access to Gym Services:
- This includes 24-month access to all gym facilities, classes, and
fitness support.
- Recognised as a continuous service performance obligation over time.
2. Incentive Goods (conditional):
- Branded towel (if 8 sessions are attended in first 8 weeks)
- Branded T-shirt (if 16 sessions are attended)
- Gym bag (if 24 sessions are attended)
- These goods are promised as rewards and represent distinct performance
obligations if they provide value to the customer and are not incidental.
Each of the incentives is conditional and only becomes an obligation if the
customer meets the relevant attendance criteria.
Journal Entry: 1 January 2025
Question 2 (b)
Dr Contract Asset / Trade Receivable R24,000
Cr Contract Liability – Gym Services R23,741
Cr Contract Liability – Incentives R259
(To recognise deferred revenue and incentives at contract inception)
Journal Entry: 31 January 2025 (No milestones met)
Question 2 (c)
Dr Bank / Cash R1,000
Cr Contract Asset / Trade Receivable R1,000
(To record receipt of monthly subscription)
Dr Contract Liability – Gym Services R989.21
Cr Gym Revenue R989.21
(To recognise one month of earned gym service revenue)
Question 2 (d)
Journal Entries: T-shirt Earned and Issued