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 $362,000 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 $48,100 and $36,000 to the bookkeeper and the clerical assistant, respectively. Employment taxes and benefit costs for Ms. Chen and her employees totaled $34,900 for the year. Expenses for office supplies, including postage, totaled $10,700 for the year. In addition, Ms. Chen spent $16,700 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 office furniture and fixtures was $15,500 for the year. During the year, Ms. Chen paid interest of $14,900 on the $122,000 borrowed to start the business. She paid an 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. a. 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 dollar.) Cathy Chen, CPA Income Statement for the Year Ended December 31, 2019 $ $ 356 ce space expense) expense 5,500 for the vear During the year Me Chen naid interest of $14,900 on the $122,000 borrowe er PI Depreciation expense for the year ended December 31, 2019. E Employment taxes and benefits Pt Interest expense for the year ended December 31, 2019. am Lease payment thy Chen below: (Select the correct accou er Salaries Sales revenue Supplies Taxes nt Travel and entertainment ber 31, 2019 356 $ 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 $362,000 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 $48,100 and $36,000 to the bookkeeper and the clerical assistant, respectively. Employment taxes and benefit costs for Ms. Chen and her employees totaled $34,900 for the year. Expenses for office supplies, including postage, totaled $10,700 for the year. In addition, Ms. Chen spent $16,700 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 office furniture and fixtures was $15,500 for the year. During the year, Ms. Chen paid interest of $14,900 on the $122,000 borrowed to start the business. She paid an 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. a. 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 dollar.) Cathy Chen, CPA Income Statement for the Year Ended December 31, 2019 $ $ 356 ce space expense) expense 5,500 for the vear During the year Me Chen naid interest of $14,900 on the $122,000 borrowe er PI Depreciation expense for the year ended December 31, 2019. E Employment taxes and benefits Pt Interest expense for the year ended December 31, 2019. am Lease payment thy Chen below: (Select the correct accou er Salaries Sales revenue Supplies Taxes nt Travel and entertainment ber 31, 2019 356 $
