On December $31,2024,$ a self$-$employed CPA completed her second year in business. Her client base has grown, and she's begun reinvesting in the firm. During the year, she billed clients for accounting services totaling $$180,000,$ but about $$8,000$ remains unpaid at year$-$end. She employs two people: a bookkeeper and a part$-$time clerical assistant. Their combined annual salaries total $$42,000.$ The owner draws a monthly salary of $$4,000.$ Expenses for office supplies, postage, and subscriptions were approximately $$5,200,$ though receipts are incomplete. The firm rents an office at $$1,350$ per month, and depreciation on office furniture and equipment totaled $$7,800.$ The CPA also paid $$7,500$ in interest on a business loan originally used to purchase equipment and launch her firm. In addition, she: Paid $$3,200$ for a continuing education course, some of which may be considered a personal development expense. Bought a new printer for $$600,$ which she expensed immediately $($though technically it should be depreciated$).$ Did not collect on one client's $$1,200$ imwoice, which may need to be written off.

You will need to classify each of the items above and calculate: EBITDA, EBIT, and Pre$-$Tax Income.

a$.(15$ points$)$ Prepare an income statement for this business owner using the following format:

Gross Revenue

$($Operating Expenses$)$

EBITDA

$($Depreciation On December $31,2024,$ a self$-$employed CPA completed her second year in business. Her client base has grown, and she's begun reinvesting in the firm. During the year, she billed clients for accounting services totaling $$180,000,$ but about $$8,000$ remains unpaid at year$-$end. She employs two people: a bookkeeper and a part$-$time clerical assistant. Their combined annual salaries total $$42,000.$ The owner draws a monthly salary of $$4,000.$ Expenses for office supplies, postage, and subscriptions were approximately $$5,200,$ though receipts are incomplete. The firm rents an office at $$1,350$ per month, and depreciation on office furniture and equipment totaled $$7,800.$ The CPA also paid $$7,500$ in interest on a business loan originally used to purchase equipment and launch her firm. In addition, she: Paid $$3,200$ for a continuing education course, some of which may be considered a personal development expense. Bought a new printer for $$600,$ which she expensed immediately $($though technically it should be depreciated$).$ Did not collect on one client's $$1,200$ imwoice, which may need to be written off.

You will need to classify each of the items above and calculate: EBITDA, EBIT, and Pre$-$Tax Income.

a$.(15$ points$)$ Prepare an income statement for this business owner using the following format:

Gross Revenue

$($Operating Expenses$)$

EBITDA

$($Depreciation