B

Income statement preparation On December 31, 2019, Cathy Chen, a self-employed certified public accountant (CPA), completed her first full year in business. During the year, she charged her clients $355,000 for her accounting services. She had two employees, a bookkeeper and a clerical assistant addition to her monthly salary of $7,950, Ms. Chen paid annual salaries of $48,100 and $36,000 to the bookkeeper and the clerical assistant, respectivel Employment taxes and benefit costs for Ms. Chen and her employees totaled $34,900 for the year. Expenses for office supplies, including postage, total $10,100 for the year. In addition, Ms. Chen spent $17,300 during the year on tax-deductible travel and entertainment associated with client visits and new business development. Lease payments for the office space rented (a tax-deductible expense) were $2,740 per month. Depreciation expense on the off furniture and fixtures was $15,200 for the year. During the year, Ms. Chen paid interest of $15,100 on the $125,000 borrowed to start the business. She average tax rate of 30% during 2019 a. Prepare an income statement for Cathy Chen, CPA, for the year ended December 31, 2019 b. Evaluate her 2019 financial performance. Prepare an income statement for Cathy Chen, CPA, for the year ended December 31, 2019 . Complete the fragment of the income statement for Cathy Chen below: (Select the correct account from the drop-down menu and round to the nearest Cathy Chen, CPA Income Statement for the Year Ended December 31, 2019 Sales revenue 355,000 $ Complete the fragment of the income statement for Cathy Chen below: (Select the correct account fr Less: Operating expenses Salaries 179,500 Employment taxes and benefits 34,900 Supplies 10,100 Travel and entertainment 17.300 Lease payment 35,620 15.200 Depreciation expense Total operating expense 292,620 $ Operating profits (EBIT) 62,380 Complete the fragment of the income statement for Cathy Chen below (Select the correct account fro Interest expense 15,100 Net profits before taxes 47,280 Complete the fragment of the income statement for Cathy Chen below: (Select the correct account fro xes 14184 33,096 Net profits after taxes (Select the best answer below.) b. Evaluate her 2019015 financial performance. OA. in her first year of business, Cathy Chen did not cover all her operating expenses, which resulted in a net loss of $50,020 on revenues of $355,000. O B. In her first year of business, Cathy Chen covered all her operating expenses and earned a net profit of $50,020 on revenues of $355,000 O C. In her first year of business, Cathy Chen did not cover all her operating expenses, which resulted in a net loss of $35,014 on revenues of $355,000. O D. In her first year of business, Cathy Chen covered all her operating expenses and earned a net profit of $35,014 on revenues of $355,000