Evaluate the following single-step income statement: Revenues: Sales Revenue \$450,000, Service Revenue \$150,000; Expenses: Wage Expense \$60,000, Interest Expense \$25,000, Cost of Goods Sold \$250,000, Income Tax Expense \$40,000, Other Expenses \$50,000. Is the net income calculation correct if it is reported as \$175,000?

• A. No, the net income should be \$185,000.
• B. No, the net income should be \$165,000.
• C. No, the net income should be \$195,000.
• D. Yes, the net income is correctly calculated.

Answer: (D)