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Case 6-30 Service Organization; Segment Reporting [LO6-4] Music Teachers, Inc., Is an educational assoclation for music teachers that has 19,900 members. The assoclation operates from

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Case 6-30 Service Organization; Segment Reporting [LO6-4] Music Teachers, Inc., Is an educational assoclation for music teachers that has 19,900 members. The assoclation operates from a central headquarters but has local membershlp chapters throughout the United States. Monthly meetings are held by the local chapters to discuss recent developments on topics of Interest to music teachers. The association's magazine, Teachers' Forum, IS Issued monthly with features about recent developments In the field. The assoclation publishes books and reports and also sponsors professional courses that quallfy for continulng professional education credit. The assoclation's statement of revenues and expenses for the current year is presented below. Music Teachers, Inc Statement of Revenues and Expenses For the Year Ended November 38 Revenues $3,354,488 Expenses: Salaries Personnel costs Occupancy costs Reimbursement of member costs to local chapters Other membership services Printing and paper Postage and shipping Instructors fees General and administrative 974,888 243,5e8 284,800 588,888 57e,888 336,808 191,808 79,888 31,888 3,288,588 $ 65,9e8 Total expenses Excess of revenues over expenses The board of directors of Music Teachers, Inc., has requested that a segmented Income statement be prepared showing the contribution of each segment to the assoclation. The assoclation has four segments: Membership Division, Magazine Subscriptions Division, Books and Reports DIvision, and Continulng Education Division. Mike Doyle has been assigned responsibilty for preparing the segmented Income statement, and he has gathered the following data: a. The 19,900 members of the assoclation pay dues of $100 per year, of which $20 covers a one-year subscription to the Teachers Forum. Other benefits Include membership In the assoclation and chapter affillation. The portion of the dues covering the magazine subscription ($20) should be assigned to the Magazine Subscriptions DIvIsion. b. A total of 3,400 one-year subscriptions to Teachers' Forum were also sold last year to nonmembers and libraries at $36 per subscription. In addition to subscriptions, the Journal generated $112,000 In advertising revenues. C. The costs to produce the Teachers' Forum magazine Included $7 per subscription for printing and paper and $4 per subscription for postage and shlpping

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