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

$ 358 comma 000$358,000

for her accounting services. She had two employees, a bookkeeper and a clerical assistant. In addition to her monthly salary of

$ 7 comma 970$7,970,

Ms. Chen paid annual salaries of

$ 48 comma 400$48,400

and

$ 36 comma 500$36,500

to the bookkeeper and the clerical assistant, respectively. Employment taxes and benefit costs for Ms. Chen and her employees totaled

$ 34 comma 700$34,700

for the year. Expenses for office supplies, including postage, totaled

$ 10 comma 600$10,600

for the year. Inaddition, Ms. Chen spent

$ 17 comma 000$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-deductibleexpense) were

$ 2 comma 670$2,670

per month. Depreciation expense on the office furniture and fixtures was

$ 15 comma 600$15,600

for the year. During the year, Ms. Chen paid interest of

$ 15 comma 200$15,200

on the

$ 118 comma 000$118,000

borrowed to start the business. She paid an average tax rate of

30 %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.

a. Prepare an income statement for Cathy Chen, CPA, for the year ended December 31, 2015.