In October, Temptations Event Planners (TEP) planned events for two clients. TEP worked 140 hours for Ward Corporation and 240 hours for Girardin Industries. TEP bills clients at the rate of $350 per hour; labor cost for its planning staff is $140 per hour. The total number of hours worked in October was 380, and overhead costs were $15,600. Overhead is applied to clients at $32 per planner-hour. In addition, TEP had $27,000 in marketing and administrative costs. All transactions are on account. All services were billed.

Required

a. Show labor and overhead cost flows through T-accounts.

b. Prepare an income statement for the company for October.