Tatiana has been working on her business plan and has been carefully assessing cash flow requirements for her business. She's starting a brand-new business and has limited access to capital. She owns the land and building where the business is located and has decided to seek a mortgage to help finance the operations. She consulted her local bank, which has agreed to a $200,000 mortgage, bearing interest at 6%. After thorough research and study, her projections include the following data for the first year of operations: Sales - $800,000; cost of sales -$540,000; operating expenses - $110,000; average inventories - $100,000; and average accounts receivable - $120,000. The mortgage will require only the payment of interest for the first three

years and then, beginning in the fourth year, require full

amortization payments at the beginning of each month for the next 10 years.

What will Tatiana's income statement show as net income before taxes in her

first year of operations?

$______________________