The correct answer is C!
Angle 1 and Angle 2 have to add to be 180 degrees (supplementary). But if statement III were additionally true, that would mean Angle 3 has to be some angle that is not zero, which isn't possible because it would put us over the degree requirement (180).
If it were true, Angle 3 would have to be zero, but it tells us in Statement III that this isn't possible.