Question

Use the balance sheets and information provided about revenue and expenses to answer the question. Lightspeed Industries Balance Sheet As of December 31, 2017 (amounts in thousands) Cash 141,000 Accounts Payable 19,000 Accounts Receivable 32,000 Debt 36,000 Inventory 49,000 Other Liabilities 20,000 Property Plant & Equipment, Gross 231,000 Total Liabilities 75,000 Accumulated Depreciation 68,000 Paid-In Capital 72,000 Property Plant & Equipment, Net 163,000 Retained Earnings 243,000 Other Assets 5,000 Total Equity 315,000 Total Assets 390,000 Total Liabilities & Equity 390,000 Lightspeed Industries Balance Sheet As of March 31, 2018 (amounts in thousands) Cash 145,000 Accounts Payable 26,000 Accounts Receivable 37,000 Debt 32,000 Inventory 45,000 Other Liabilities 18,619 Property Plant & Equipment, Gross 231,000 Total Liabilities 76,619 Accumulated Depreciation 68,600 Paid-In Capital 72,000 Property Plant & Equipment, Net 162,400 Retained Earnings 245,781 Other Assets 5,000 Total Equity 317,781 Total Assets 394,400 Total Liabilities & Equity 394,400 Revenue and expenses information from January 1 to March 31, 2018 were: Sales Revenue of $9,200,000 COGS of 25% of Sales Interest of $190,000 Other Expenses of $300,000 SG&A of $920,000 Tax Rate of 37% 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

Sales Revenue		$9,200,000
Less Cost of Goods Sold - COGS [$9,200,000 x 25%]		$2,300,000
Gross Profit		$6,900,000
Operating Expenses:
Selling, General & Administrative expenses - SG&A	$920,000
Other Expenses	$300,000	($1,220,000)
Oerating Income		$5,680,000
Non- Operating Income (Expense)
Interest Expense		($190,000)
Income before Income tax		$5,490,000
Income tax Expense [$5,490,000 x 37%]		($2,031,300)
Net Income		$3,458,700

Therefore, net income in the first quarter of 2018 = $3,458,700 = $3,459 (In Thousands)