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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 $363,000 for her accounting services. She had two employees, a bookkeeper and a clerical assistant. In addition to her monthly salary of $7,970, Ms. Chen paid annual salaries of $47,800 and $35,500 to the bookkeeper and the clerical assistant, respectively. Employment taxes and benefit costs for Ms. Chen and her employees totaled $34,300 for the year. Expenses for office supplies, including postage, totaled $10,800 for the year. In addition, Ms. Chen spent $16,900 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 $2,720 per month. Depreciation expense on the office furniture and fixtures was $15,700 for the year. During the year, Ms. Chen paid interest of $14,500 on the $116,000 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. a. Prepare an income statement for Cathy Chen, CPA, for the year ended December 31, 2015. 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, 2015 Sales revenue $ 363,000 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.) Less: Operating expenses Salaries 95640 Employment taxes and benefits 83300 Supplies Travel and entertainment Lease payment Depreciation expense Total operating expense $ Operating profits (EBIT) 24

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 $363,000 for her accounting services. She had two employees, a bookkeeper and a clerical assistant. In addition to her monthly salary of $7,970, Ms. Chen paid annual salaries of $47,800 and $35,500 to the bookkeeper and the clerical assistant, respectively. Employment taxes and benefit costs for Ms. Chen and her employees totaled $34,300 for the year. Expenses for office supplies, including postage, totaled $10,800 for the year. In addition, Ms. Chen spent $16,900 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 $2,720 per month. Depreciation expense on the office furniture and fixtures was $15,700 for the year. During the year, Ms. Chen paid interest of $14,500 on the $116,000 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. a. Prepare an income statement for Cathy Chen, CPA, for the year ended December 31, 2015. 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, 2015 Sales revenue $ 363,000 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.) Less: Operating expenses Salaries 95640 Employment taxes and benefits 83300 Supplies Travel and entertainment Lease payment Depreciation expense Total operating expense $ Operating profits (EBIT) 24

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 13EB: Marc Associates employs Janet Evanovich at its law firm. Her gross income for June is $7,500....
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Need help to understand how to complete this income statment. Please show the work where applicable. 

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 $363,000 for her accounting services. She had two employees, a bookkeeper and a clerical assistant. In addition to her monthly salary of $7,970, Ms. Chen paid annual salaries of $47,800 and $35,500 to the bookkeeper and the clerical assistant, respectively. Employment taxes and benefit costs for Ms. Chen and her employees totaled $34,300 for the year. Expenses for office supplies, including postage, totaled $10,800 for the year. In addition, Ms. Chen spent $16,900 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 $2,720 per month. Depreciation expense on the office furniture and fixtures was $15,700 for the year. During the year, Ms. Chen paid interest of $14,500 on the $116,000 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. a. Prepare an income statement for Cathy Chen, CPA, for the year ended December 31, 2015. 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, 2015 Sales revenue $ 363,000 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.) Less: Operating expenses Salaries 2$ 95640 Employment taxes and benefits 83300 Supplies Travel and entertainment Lease payment Depreciation expense Total operating expense $ Operating profits (EBIT) $
Transcribed Image Text: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 $363,000 for her accounting services. She had two employees, a bookkeeper and a clerical assistant. In addition to her monthly salary of $7,970, Ms. Chen paid annual salaries of $47,800 and $35,500 to the bookkeeper and the clerical assistant, respectively. Employment taxes and benefit costs for Ms. Chen and her employees totaled $34,300 for the year. Expenses for office supplies, including postage, totaled $10,800 for the year. In addition, Ms. Chen spent $16,900 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 $2,720 per month. Depreciation expense on the office furniture and fixtures was $15,700 for the year. During the year, Ms. Chen paid interest of $14,500 on the $116,000 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. a. Prepare an income statement for Cathy Chen, CPA, for the year ended December 31, 2015. 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, 2015 Sales revenue $ 363,000 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.) Less: Operating expenses Salaries 2$ 95640 Employment taxes and benefits 83300 Supplies Travel and entertainment Lease payment Depreciation expense Total operating expense $ Operating profits (EBIT) $
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