income statement

Project Description:

income statement preparation on december 31, 2009, cathy chen, a selfemployed
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 2009.
a. prepare an income statement for cathy chen, cpa, for the year ended
december 31, 2009.
b. evaluate her 2009 financial performance.
personal finance
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Price Type: Negotiable

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