Perth Corporation has two operating divisions, a casino and a hotel. The two divisions meet the requirements for segment disclosure Before transactions between the two divisions are considered, revenues and costs are as follows: Revenues Costs Casino $31,000,000 18,000,000 Hotel $24,000,000 12,000,000 The casino and the hotel have a joint marketing arrangement by which the hotel gives coupons redeemable at casino slot machines and the casino gives discount coupons good for stays at the hotel. The value of the coupons for the slot machines redeemed during the past year totaled $6,000,000. The discount coupons redeemed at the hotel totaled $1,000,000. As of the end of the year, all coupons for the current year expired. Required: What are the operating profits for each division considering the effects of the costs arising from the joint marketing agreement? (Ente your answers in thousands.) Casino Hotel Operating Profits 4
Perth Corporation has two operating divisions, a casino and a hotel. The two divisions meet the requirements for segment disclosure Before transactions between the two divisions are considered, revenues and costs are as follows: Revenues Costs Casino $31,000,000 18,000,000 Hotel $24,000,000 12,000,000 The casino and the hotel have a joint marketing arrangement by which the hotel gives coupons redeemable at casino slot machines and the casino gives discount coupons good for stays at the hotel. The value of the coupons for the slot machines redeemed during the past year totaled $6,000,000. The discount coupons redeemed at the hotel totaled $1,000,000. As of the end of the year, all coupons for the current year expired. Required: What are the operating profits for each division considering the effects of the costs arising from the joint marketing agreement? (Ente your answers in thousands.) Casino Hotel Operating Profits 4
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Perth Corporation has two operating divisions, a casino and a hotel. 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
Casino
$31,000,000
18,000,000
Hotel
$24,000,000
12,000,000
The casino and the hotel have a joint marketing arrangement by which the hotel gives coupons redeemable at casino slot machines
and the casino gives discount coupons good for stays at the hotel. The value of the coupons for the slot machines redeemed during
the past year totaled $6,000,000. The discount coupons redeemed at the hotel totaled $1,000,000. As of the end of the year, all
coupons for the current year expired.
Required:
What are the operating profits for each division considering the effects of the costs arising from the joint marketing agreement? (Enter
your answers in thousands.)
Casino
Hotel
Operating
Profits
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