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