In the first year of operations, Harden Co. earned $39,000 in revenues and received $33,000 cash from this customers. The company incurred expenses of $22,500 but had not paid $2,250 of them at year-end. Harden also prepaid $3,750 cash for expenses that would be incurred the next year.
Calculate the first year's net income under the cash basis and accrual accounting.