n its first year of operations, Athabasca Corp. earned $55,000 in service revenue. Of that amount, $8,680 was on account and the remainder, $46,320, was collected in cash from customers.

The company incurred various expenses totalling $31,300, of which $27,800 was paid in cash. At year end, $3,500 was still owing on account. In addition, Athabasca prepaid $2,000 for insurance coverage that covered the last half of the first year and the first half of the second year. Athabasca expects to owe $4,200 of income tax when it files its corporate income tax return after year end.

Calculate the first years profit under the accrual and cash basis of accounting.