Ruston Company Balance Sheet As of December 31 2017 amounts

Ruston Company Balance Sheet As of December 31, 2017 (amounts in thousands) 12,000 36,000 21,000 69,000 59,000 228,000 287,000 356,000 Cash Accounts Receivable Inventory 90,000 Accounts Payable 34,000 Debt 51,000 Other Liabilities 230,000 Total Liabilities 55,000 Paid-In Capital 175,000 Retd Earnings 6,000 Total Equity Property Plant & Equipment, Gross Accumulated Depreciation Property Plant& Equipment, Net Other Assets Total Assets 356,000 Total Liabilities & Equity Ruston Company Balance Sheet As of March 31, 2018 (amounts in thousands) 15,000 43,000 5,737 63,737 59,000 230,463 289,463 353,200 Cash 88,000 Accounts Payable 40,000 Debt 41,000 Other Liabilities 230,000 Total Liabilities 55,800 Paid-In Capital 174,200 Retained Earnings 10,000 Total Equity Accounts Receivable Inventory Property Plant & Equipment, Gross Accumulated Depreciation Property Plant & Equipment, Net Other Assets Total Assets 353,200 Total Liabilities & Equity Revenue and expenses information from January 1 to March 31, 2018 were: Sales Revenue of $8,700,000 COGS of 25% of Sales Interest of $60,000 Other Expenses of $500,000 SG&A; of $870,000 Tax Rate of 38% What is the net income in the first quarter of 2018? Please specify your answer in the same units as the balance sheets and round your answer to the nearest integer

Solution

Ruston Company Calculation of net Income (For the period from January 1 to March 31) (Amounts in thousand) Sales Revenue $ 8,700 COGS $ 2,175 Gross Profit $ 6,525 Operating Expense: SG&A $ 870 Other Expenses $ 500 Earning before Interest and Taxes $ 5,155 Tax Expense $ 1,959 Net Income $ 3,196