Income statement preparation Cathy Chen, a self$-$employed certified public accountant $($CPA$),$ just completed her first full year in business. During the year, she charged her clients $$355,000$ for

her accounting services. She had two employees, a bookkeeper and a clerical assistant. In addition to her monthly salary of $$8,000,$ Ms$.$ Chen paid annual salaries of $$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 $$34,100$ for the year. Expenses for office supplies, including

postage, totaled $$10,200$ for the year. In addition, Ms$.$ Chen spent $$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 $$2,740$ per month. Depreciation expense on the office furniture and fixtures was $$15,300$ for the year. During the year,

Ms$.$ Chen paid interest of $$15,100$ on the $$118,000$ borrowed to start the business. Her average tax rate for the year was $30\%.$

a$.$ Prepare an income statement for Cathy's business for the year.

b$.$ Evaluate her financial performance for the year.

a$.$ Prepare an income statement for Cathy's business for the year.

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 $31,2021$

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

$

Total operating expense

Operating profits $($EBIT$)$

$

$