In its first year of operations, Roma Company reports the following.

Compute Roma’s first-year net income under the cash basis and the accrual basis of accounting.
• Earned revenues of $45,000 ($37,000 cash received from customers).
• Incurred expenses of $25,500 ($20,250 cash paid toward them).
• Prepaid $6,750 cash for costs that will not be expensed until next year.