In its first year of operations, Wildhorse Co. recognized $24,080 in service revenue, $5,160 of which was on account and still outstanding at year-end. The remaining $18,920 was received in cash from customers. The company incurred operating expenses of $13,588. Of these expenses, $10,320 were paid in cash; $3,268 was still owed on account at year-end. In addition, Wildhorse prepaid $2,064 for insurance coverage that would not be used until the second year of operations. (a) Calculate the first years net earnings under the cash basis of accounting, and calculate the first years net earnings under the accrual basis of accounting.

		Cash Basis		Accrual Basis
Net Income		$		$