SheridanIndustries manufactures sump-pumps. Its most popular product is called the Super Soaker, which has a retail price of $1,130 and costs $500 to manufacture. It sells the Super Soaker on a standalone basis directly to businesses. Sheridan also provides installation services for these commercial customers, who want an emergency pumping capability (with regular and back-up generator power) at their businesses. Sheridan also distributes the Super Soaker through a consignment agreement with Menards. Income data for the first quarter of 2017 from operations other than the Super Soaker are as follows.

Revenues		$9,693,000
Expenses		7,288,000

Sheridanhas the following information related to two Super Soaker revenue arrangements during the first quarter of 2017.

1.		Sheridan sells 3 Super Soakers to businesses in flood-prone areas for a total contract price of $59,000. In addition to the pumps, Sheridan also provides installation (at a cost of $170 per pump). On a standalone basis, the fair value of this service is $210 per unit installed. The contract payment also includes a $11 per month service plan for the pumps for 3 years after installation (Sheridans cost to provide this service is $6 per month). The Super Soakers are delivered and installed on March 1, 2017, and full payment is made to Sheridan. Any discount is applied to the pump/installation bundle.
2.		During ships 270 Super Soakers to Menards on consignment. By March 31, 2017, Menards has sold two-thirds of the consigned merchandise at the listed price of $1,130 per unit. Menards notifies Sheridan of the sales, retains a 5% commission, and remits the cash due Sheridan. a. Determine Sheridan Industries 2017 first-quarter net income. (Ignore taxes.) b.Determine free cash flow for Sheridan Industries for the first quarter of 2017. In the first quarter, Sheridan had depreciation expense of $181,000 and a net increase in working capital (change in accounts receivable and accounts payable) of $239,000. In the first quarter, capital expenditures were $528,000; Sheridan paid dividends of $114,000.