On December 30,2015, Cathey Chen,a self employeed CPA, completed her first full year in b
On December 30,2015, Cathey Chen,a self employeed CPA, completed her first full year in business.Duringthe year, she billed $360000 for her acccounting services.She had two employees, a bookkeeper and a clergical assistant. Inaddition to her monthly salaries of $8000, Ms. Chen paid annualsalaries of $48000 and $36000 to the bookkeeper and the clergicalassistant, repectively. Employment taxes and benefit costs for Ms.Chen and her employees totaled $34600 for the year. Expenses foroffice supplies including package, totaled $10400 for the year. Inaddition, Ms. Chen spent $17000 during the year on tax-dedcutibletravel and entiretainment associated with client visits and newbusiness development. Lease payments for the office space rented( atax-deductible expense) were $2700 per month. Depreciation expenseon the office furniture and fixtures was $15600 for the year.During the year, Ms. Chen paid interest of $15000 on the $120000borrowed to start the business. She paid an average tax rate of 30%during 2015.
Prepare an income statement for Cathey Chen CPA for the yearended Dec 31, 2015.
Evaluate her financial performance.