Revenue Recognition and Matching}

Aunt Bea's Catering Service provides catering service for special occasions. During 2018, Aunt Bea performed \(\$ 128,300\) of catering services and collected \(\$ 118,500\) of cash from customers. Salaries earned by Aunt Bea's employees during 2018 were \(\$ 38,500\). Aunt Bea paid employees \(\$ 35,000\) during 2018. Aunt Bea had \(\$ 1,200\) of supplies on hand at the beginning of the year and purchased an additional \(\$ 8,000\) of supplies during the year. Supplies on hand at the end of 2018 were \(\$ 1,830\). Other selling and administrative expenses incurred during 2018 were \(\$ 5,800\)

\section*{Required:}

1. Calculate revenue and expenses for 2018 .

2. Prepare the 2018 statement of earnings.

3. CONCEPTUAL CONNECTION Describe the accounting principles used to prepare the statement of earnings.

\section*{Problem