Aunt Bea’s Catering Service provides catering service for special occasions. During 2011, Aunt Bea performed $128,300 of catering services and collected $118,500 of cash from customers. Salaries earned by Aunt Bea’s employees during 2011 were $38,500. Aunt Bea paid employees $35,000 during 2011. Aunt Bea had $1,200 of supplies on hand at the beginning of the year and purchased an additional $8,000 of supplies during the year. Supplies on hand at the end of 2011 were $1,830. Other selling and administrative expenses incurred during 2011 were $5,800.
Required:
1. Calculate revenue and expenses for 2011.
2. Prepare the 2011 income statement.
3. Describe the accounting principles used to prepare the income statement.