Use This Information to Answer the Following Question If the Income Statement Were Prepared in a Multistep Form,income

question 72

Multiple Choice

Use this information to answer the following question. $\begin{array}{c}\text { Alcorn \& Zeto Company}\\\text { Income Statement}\\\text { For the Year Ended December 31, 2010}\\\begin{array}{lrr}\text { Revenues } & \\\text { Net sales } & \$ 100,000 \\\text { Dividend income } &\underline{8,750} \\\text { revenues } &&\$108,750\\\text { Costs and expenses } & \\\text { Costs of goods sold } & \$ 30,000 \\\text { Selling expenses } & 10,000 \\\text { General and administrative expenses } & 13,750 \\\text { Interest expense } & \underline{ 6,250} \\\text { Total costs and expenses } && \underline{60,000} \\\text { before income taxes } && \$ 48,750 \\\text { Income taxes } && \underline{ 19,500} \\\text { Net income } && \underline{ \$ 29,250}\end{array}\end{array}$
If the income statement were prepared in a multistep form,income before income taxes would be

• A) $33,750.
• B) $52,500.
• C) $40,000.
• D) $48,750.

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Definitions:

Financial Viability

The ability of an entity to generate sufficient income to meet its operational needs and financial obligations, ensuring long-term sustainability.

Contract Clause

A specific provision or section within a contract that outlines a particular requirement, right, or duty.

Unreasonable Financial Hardship

A situation where an individual's financial obligations are so burdensome that they cannot meet basic living expenses.

Availability

The extent to which goods, services, or resources are accessible and ready for use by consumers or businesses.