In its first year of operations, Roma Company reports the following: Earned revenues of $51,000 ($43,000 cash received from customers). Incurred expenses of $28,500 ($22,350 cash paid toward them). Prepaid $8,250 cash for costs that will not be expensed until next year. Compute the companys first-year net income under both the cash basis and the accrual basis of accounting.

In its first year of operations, Roma Company reports the following: Earned revenues of $51,000 ($43,000 cash received from customers). Incurred expenses of $28,500 ($22,350 cash paid toward them). Prepaid $8,250 cash for costs that will not be expensed until next year. Compute the company's first-year net income under both the cash basis and the accrual basis of accounting. Revenues Expenses Cash Basis Accrual Basis 43,000 $ 51,000 28,500 Net income