Ferntree Experiences has two operating divisions, Winery and Restaurant. The two divisions have a marketing agreement to provide Incentives to customers. The Winery division offers coupons good for meals at the restaurants and the Restaurant division offers coupons good for wine tastings and purchases. Annual profits are $30 million. The two divisions meet the requirements for segment disclosures. Before the transactions are considered, revenues and costs (in thousands of dollars) for the two divisions are as follows. Restaurant Winery $45,000 $22,500 Revenue Costs Profit ? ? Revenues Costs Profit After adjusting appropriately for the effect of the marketing agreement, the revenues and costs are as follows. Winery ? Restaurant ? ? $13,400 ? $10,000 ? ? The value of the coupons issued by the Restaurant Division was double the value of the coupons issued by the Winery Division. Required: What was the value of the coupons issued by the Winery Division? By the Restaurant Division? (Enter your answers in whole dollars not in thousands of dollars.) Value of coupons issued by Winery Division Value of coupons issued by Restaurant Division

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Question

11.

Subject :- Accounting 

Ferntree Experiences has two operating divisions, Winery and Restaurant. The two divisions have a marketing agreement to provide
Incentives to customers. The Winery division offers coupons good for meals at the restaurants and the Restaurant division offers
coupons good for wine tastings and purchases. Annual profits are $30 million. The two divisions meet the requirements for segment
disclosures.
Before the transactions are considered, revenues and costs (in thousands of dollars) for the two divisions are as follows.
Winery
$45,000
Restaurant
$22,500
Revenue
Costs
Profit
After adjusting appropriately for the effect of the marketing agreement, the revenues and costs are as follows.
Winery
?
Restaurant
?
$13,400
?
Revenues
Costs
Profit
$10,000
The value of the coupons issued by the Restaurant Division was double the value of the coupons issued by the Winery Division.
Required:
What was the value of the coupons issued by the Winery Division? By the Restaurant Division? (Enter your answers in whole dollars
not in thousands of dollars.)
Value of coupons issued by Winery Division
Value of coupons issued by Restaurant Division
Transcribed Image Text:Ferntree Experiences has two operating divisions, Winery and Restaurant. The two divisions have a marketing agreement to provide Incentives to customers. The Winery division offers coupons good for meals at the restaurants and the Restaurant division offers coupons good for wine tastings and purchases. Annual profits are $30 million. The two divisions meet the requirements for segment disclosures. Before the transactions are considered, revenues and costs (in thousands of dollars) for the two divisions are as follows. Winery $45,000 Restaurant $22,500 Revenue Costs Profit After adjusting appropriately for the effect of the marketing agreement, the revenues and costs are as follows. Winery ? Restaurant ? $13,400 ? Revenues Costs Profit $10,000 The value of the coupons issued by the Restaurant Division was double the value of the coupons issued by the Winery Division. Required: What was the value of the coupons issued by the Winery Division? By the Restaurant Division? (Enter your answers in whole dollars not in thousands of dollars.) Value of coupons issued by Winery Division Value of coupons issued by Restaurant Division
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