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Eastlawn Travel has two operating divisions, Tours and Resorts. The two divisions me requirements for segment disclosures. Before transactions between the two divisions a revenues and costs are as follows: Revenues Costs Tours $35,380,000 19,890,000 Resorts $24,380,000 17,690,000

Eastlawn Travel has two operating divisions, Tours and Resorts. The two divisions me requirements for segment disclosures. Before transactions between the two divisions a revenues and costs are as follows: Revenues Costs Tours $35,380,000 19,890,000 Resorts $24,380,000 17,690,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Eastlawn Travel has two operating divisions, Tours and Resorts. The two divisions meet the requirements for segment disclosures. Before transactions between the two divisions are considered, revenues and costs are as follows: Revenues Costs Tours $ 35,380,000 19,890,000 The two divisions have an arrangement by which Resorts gives coupons redeemable for tours and Tours gives discount coupons good for stays at a resort. The value of the coupons for the tours redeemed during the past year totaled $7.1 million. The discount coupons redeemed at the resorts totaled $4.0 million. As of the end of the year, all coupons for the current year expired. Tours Resorts Resorts $ 24,380,000 17,690,000 Required: What are the operating profits for each division considering the effects of the costs arising from the joint agreement? Note: Enter your answers in thousands. Operating Profits
Transcribed Image Text:Eastlawn Travel has two operating divisions, Tours and Resorts. The two divisions meet the requirements for segment disclosures. Before transactions between the two divisions are considered, revenues and costs are as follows: Revenues Costs Tours $ 35,380,000 19,890,000 The two divisions have an arrangement by which Resorts gives coupons redeemable for tours and Tours gives discount coupons good for stays at a resort. The value of the coupons for the tours redeemed during the past year totaled $7.1 million. The discount coupons redeemed at the resorts totaled $4.0 million. As of the end of the year, all coupons for the current year expired. Tours Resorts Resorts $ 24,380,000 17,690,000 Required: What are the operating profits for each division considering the effects of the costs arising from the joint agreement? Note: Enter your answers in thousands. Operating Profits
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