If $v'$ is final velocity of wagon, then applying principle of conservation of linear momentum, we get,
$5 \times 10^{3} \times 1.2 =\left(5 \times 10^{3}+10^{3}\right) \times v'$
$v'=1 \,ms ^{-1}$
Change in KE
$=\frac{1}{2}\left(6 \times 10^{3}\right) \times 1^{2}-\frac{1}{2}\left(5 \times 10^{3}\right)(1.2)^{2} $
$=600\, J$