Question

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

Gulf Shipping Company Balance Sheet As of December 31, 2017 (amounts in thousands)
Cash	143,000	Accounts Payable	19,000
Accounts Receivable	41,000	Debt	32,000
Inventory	58,000	Other Liabilities	40,000
Property Plant & Equipment, Gross	210,000	Total Liabilities	91,000
Accumulated Depreciation	62,000	Paid-In Capital	77,000
Property Plant & Equipment, Net	148,000	Retained Earnings	229,000
Other Assets	7,000	Total Equity	306,000
Total Assets	397,000	Total Liabilities & Equity	397,000

Gulf Shipping Company Balance Sheet As of March 31, 2018 (amounts in thousands)
Cash	145,000	Accounts Payable	24,000
Accounts Receivable	39,000	Debt	41,000
Inventory	65,000	Other Liabilities	28,053
Property Plant & Equipment, Gross	210,000	Total Liabilities	93,053
Accumulated Depreciation	63,200	Paid-In Capital	77,000
Property Plant & Equipment, Net	146,800	Retained Earnings	230,747
Other Assets	5,000	Total Equity	307,747
Total Assets	400,800	Total Liabilities & Equity	400,800

Revenue and expenses information from January 1 to March 31, 2018 were:
Sales Revenue of $7,900,000
COGS of 20% of Sales
Interest of $100,000
Other Expenses of $300,000
SG&A of $1,580,000
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

Net income in the first quarter of 2018 = $1947 (Thousands)

Explanation;

Income Statement
For first quarter from January 1 to March 31, 2018
Sales revenue	$7900000
Less: COGS (20% of sales)	($1580000)
Gross margin	$6320000
Less:
Interest	($100000)
Other expenses	($300000)
SG&A	($1580000)
Depreciation expenses ($63200000 - $62000000)	($1200000)
Net income before tax	$3140000
Less: Tax expense (38%)	($1193200)
Net income	$1946800
Net income (In thousands)	$1946.8 or $1947 (Approx.)