You are given a choice of taking the simple interest on 100,000 invested for 2 years

Income Statement Preparation - 
On December 31, 2009, Cathy Chen, a self 
employed CPA, completed her first year of business. During the year, she billed 
$360,000 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 $48,000 and $36,000 to the bookkeeper and the clerical 
assistant. Employment taxes and benefit costs for Ms. Chen and her employees 
totaled $34,600 for the year. Expenses for office supplies, including postage, 
totaled $10,400 for the year. In addition, Ms. Chen spent $17,000 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 $2,700 per month. Depreciation expense on the office 
furniture and fixtures was $15,600 for the year. During the year, Ms. Chen paid 
interest of $15,000 on the $120,000 borrowed to start the business. She paid an 
average tax rate of 30% during 2009.
a. Prepare an income statement for Cathy 
Chen, CPA, for the year ended December 31, 2009.
b. Evaluate her 2009 
financial performance.

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