What does fitness have to do with accounting?

Consider the types of transactions that might occur on a regular basis in each of Fitness Solutions two divisions: (1) fitness clubs and (2) Fitness Equipment Retail. How would the transactions for the two divisions differ? From the following list of transactions, decide in which division the transaction would most likely occur. What would most likely be the source document(s) for each transaction? Defend your answers.



Fitness Solutions sold 250 memberships to its fitness centers in November of 2006.

Fitness Solutions earned $400,000 in revenues from providing the services of a personal trainer.

Fitness Solutions reported $850,000 in sales from selling fitness equipment.

Fitness Solutions purchased $500,000 in fitness equipment that it plans to resell.

Fitness Solutions paid $2,500 for towel-laundering services for 2006.

Fitness Solutions paid its CEO $250,000 for 2006.

Fitness Solutions paid $1,500 for an advertisement campaign to sell new memberships.

Fitness Solutions reported $300,000 in Cost of Goods Sold for 2006.

Fitness Solutions paid $100,000 in sales salaries for 2006.

Fitness Solutions paid $1,500 in equipment repairs for 2006.What does fitness have to do with accounting?OK, I'll give it a shot.



Memberships - fitness center. Source document would be receipts issued for memberships or contracts with members.



Personal trainer - fitness center. Source docs would be time records of trainers and bills issued to customers, possibly signed receipts from customers.



Sales of equipt - fitness equipt retail. Source would be sales contracts.



Purchase of equipt - fitness equipt retail. Source docs would be invoices which should be matched with receiving reports and packing lists.



Towel laundering - fitness center. Source doc - invoice from service company.



Pay CEO - both - his time is likely spent overseeing both divisions. Source docs would be his contract and payroll records.



Ad campaign - fitness center. Source doc is the agreement with the ad company and the invoices received.



cost of sales - equipt retail. Assuming specific identification of inventory is used, the source document would be inventory records.



Sales salaries - both, assuming sales of memberships and equipt both require a sales effort. Source doc would be commission reports, payroll records.



Equipt repairs - fitness center. Source docs - bills from company performing repairs supported by work orders.