During 20X1. Hogan Company had credit sales of $40,000 and cash sales of $18,000. In 20X1 Hogan collected $21,000 of accounts receivable resulting from sales on credit. Hogan incurred operating expenses of $7,500; of this amount, $2.900 was paid in 20x1, and the $4,600 balance represented a liability at year-end. In addition to these operating expenses, Hogan also purchased for cash a three-year insurance policy on January 1, 20X1. The cost of this policy was $3,000. What is Hogan's 20x1 cash basis net income