Exercise 15-40(Algo) Segment Reporting (LO 15-5) Eastlawn Travel has two operating divisions, Tours...
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Exercise Algo Segment Reporting LO
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:
ToursResortsRevenues$ $ Costs
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 $ million. The discount coupons redeemed at the resorts totaled $ million. 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 agreement?
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