One year ago, Tyler Stasney founded Swift Classified Ads. Stasney remembers that you took an accounting course while in college and comes to you for advice. He wishes to know how much net income his business earned during the past year in order to decide whether to keep the company going. His accounting records consist of the T-accounts from his ledger, which were prepared by an accountant who moved to another city. The ledger at December 31 follows. The accounts have not been adjusted. Stasney indicates that at year-end, customers owe him $1,600 for accrued service revenue. These revenues have not been recorded. During the year, Stasney collected $4,000 service revenue in advance from customers, but he earned only $900 of that amount. Rent expense for the year was $2,400, and he used up $1,700 of the supplies. Stasney determines that depreciation on his equipment was $5,000 for the year. At December 31, he owes his employee $1,200 accrued salary.

Requirement
1. Help Stasney compute his net income for the year. Advise him whether to continue operating Swift ClassifiedAds.

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Accounts receivable Dec 31 12,000| Prepaid rent Jan 2 2,800 | Supplies Cash Jan 2 2,600 Dec 31 5,800 Accumulated depreciation Accounts payable Dec 31 21,500 Equipment Jan 2 36,000 Salary payable Unearned service revenue Dec 31 4,000 Service revenue |Dec 31 59,500 Common stock | Dec 31 5,000 Retained earnings Dividends Dec 31 28,000| | Dec 31 15,000 Utilities expense Salary expense Dec 31 17,000| Depreciation expense Rent expense Dec 31 800 Supplies expense