Guessco Reported the Following Amounts on Its Income Statement: Total

question 98

Multiple Choice

Guessco reported the following amounts on its income statement: total revenues,$31,500; interest expense,$300; net income,$1,600; income tax expense,$900; and operating income,$2,800.What was the amount of Guessco's income before income tax expense?

• A)$1,300.
• B)$2,500.
• C)$29,000.
• D)$29,900.

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Definitions:

Opportunity Cost

The cost of foregone alternatives; the loss of potential gain from other alternatives when one alternative is chosen.

Televisions

Electronic devices for receiving and displaying visual media, often used for broadcasting entertainment, news, and other information.

Bushels

A measure of volume used primarily for agricultural commodities, varying in actual weight depending on the substance being measured.

Opportunity Cost

The cost of forgoing the next best alternative when a choice is made, essentially what is given up when choosing one option over another.