Income statement, service sector. Creative Advertising (CA) operates a boutique agencv specializing in developing television advertisements for consumer products. The following information applies lo 19_5.

a. CA's revenues are 15% of the amounts television stations charge companies for running ad- vertisements developed by CA. (That is, if a television station charges a company 510,000 to run an advertisement, CA will be paid SI ,500. Thus, the total cost to the company oi the advertisement is 511,500.) In 19_5, these companies were charged SI 0,000,000 for CA-developed advertisements.

b. CA has three partners (paid SI 50,000 each in salary and benefits in 19 5) and three support staff (paid S50,000 each in salary and benefits in 19_5).

c. Rent costs for CA's office in a prime location were SI 80,000 in 195.

d. Other operating costs of CA in 19_5 were S227,050.

Required 1. Prepare CA's income statement for 19_5.

2. Name one difference between CA's income statement and that of

a. a merchandising-sector company and

b. a manufacturing-sector company.