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In its first year of operations, Debra Corp. earned $$55,600$ in service revenue. Of that amount, $$8,900$ was on account and the remainder, $$46,700,$ was collected in cash from customers.

The company incurred various expenses totalling $$32,800,$ of which $$28,400$ was paid in cash. At year end, $$4,400$ was still owing on account. In addition, Debra prepaid $$2,900$ for insurance coverage for the last half of the first year and the first half of the second year. Debra expects to owe $$3,900$ of income tax when it files its corporate income tax return after year end.

$($a$)$

Your answer is incorrect.

Calculate the first year's net income under the accrual basis of accounting.

Net income under accrual basis $