Question

Use the balance sheets and information provided about revenue and expenses to answer the question.

Ruston Company Balance Sheet As of December 31, 2017 (amounts in thousands)
Cash	90,000	Accounts Payable	12,000
Accounts Receivable	34,000	Debt	36,000
Inventory	51,000	Other Liabilities	21,000
Property Plant & Equipment, Gross	230,000	Total Liabilities	69,000
Accumulated Depreciation	55,000	Paid-In Capital	59,000
Property Plant & Equipment, Net	175,000	Retained Earnings	228,000
Other Assets	6,000	Total Equity	287,000
Total Assets	356,000	Total Liabilities & Equity	356,000

Ruston Company Balance Sheet As of March 31, 2018 (amounts in thousands)
Cash	88,000	Accounts Payable	15,000
Accounts Receivable	40,000	Debt	43,000
Inventory	41,000	Other Liabilities	5,737
Property Plant & Equipment, Gross	230,000	Total Liabilities	63,737
Accumulated Depreciation	55,800	Paid-In Capital	59,000
Property Plant & Equipment, Net	174,200	Retained Earnings	230,463
Other Assets	10,000	Total Equity	289,463
Total Assets	353,200	Total Liabilities & Equity	353,200

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.

Answer 1