Income statement preparation On December $31,2015,$ Cathy Chen, a self$-$employed

certified public accountant $($CPA$),$ completed her first full year in business. During

the year, she billed $$360,000$ for her accounting services. She had two employees, a

bookkeeper and a clerical assistant. In addition to her monthly salary of $$8,000,$

Ms$.$ Chen paid annual salaries of $$48,000$ and $$36,000$ to the bookkeeper and the

clerical assistant, respectively. Employment taxes and benefit costs for Ms$.$ Chen and

her employees totaled $$34,600$ for the year. Expenses for office supplies, including

postage, totaled $$10,400$ for the year. In addition, Ms$.$ Chen spent $$17,000$ 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 $$2,700$ per month. Depreciation expense on the office

furniture and fixtures was $$15,600$ for the year. During the year, Ms$.$ Chen paid

interest of $$15,000$ on the $$120,000$ borrowed to start the business. She paid an

average tax rate of $30\%$ during $2015.$

a$.$ Prepare an income statement for Cathy Chen, CPA, for the year ended December

$31,2015.$

b$.$ Evaluate her $2015$ financial performance.