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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 $360,000 for her accounting services. She had two employees, a bookkeeper and a clerical assistant. In addition to her monthly salary of $7,970, Ms. Chen paid annual salaries of $48,200 and $35,800 to the bookkeeper and the clerical assistant, respectively. Employment taxes and benefit costs for Ms. Chen and her employees totaled $34,700 for the year. Expenses for office supplies, including postage, totaled $10,600 for the year. In addition, Ms. Chen spent $17,400 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 $2,730 per month. Depreciation expense on the office furniture and fixtures was $15,900 for the year. During the year, Ms. Chen paid interest of $14,700 on the $125,000 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.) 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) $ 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.) Income statement preparation Cathy Chen, a self-employed certified public accountant Net profits before taxes 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.) Net profits after taxes b. Evaluate her financial performance for the year. (Select the best answer below.) A. In her first year of business, Cathy Chen did not cover all her operating expenses, which resulted in a net loss of $38,010 on revenues of $360,000. B. In her first year of business, Cathy Chen coveredall her operating expenses and earned a net profit of $54,300 on revenues of $360,000. C. In her first year of business, Cathy Chen did not cover all her operating expenses, which resulted in a net loss of $54,300 on revenues of $360,000. D. In her first year of business, Cathy Chen covered all her operating expenses and earned a net profit of $38,010 on revenues of $360,000