Calculate the Net Profit before tax and extraordinary items :

i. Net Profit during the year- ₹1,50,000
ii. Proposed dividend - ₹40,000 (For Previous year)
iii. Income Tax provisions - ₹20,000 (For current year)
iv. Interim Dividend - ₹25,000 (Paid during the year)

₹2,35,000

The correct answer is option 4- ₹2,35,000.

Net Profit during the year- ₹1,50,000
ADD: Proposed dividend - ₹40,000
ADD:  Income Tax provisions - ₹20,000
ADD: Interim Dividend - ₹25,000
Net Profit before tax and extra ordinary items = 1,50,000 + 40,000 + 20,000 + 25,000
                                                                            = ₹2,35,000

* Proposed dividend is of the previous year is approved in the current year and has also been paid during the current year so it is added to the net profit as dividend paid is financing activity. 

* Interim dividend paid during the year is also added to the net profit as dividend paid is financing activity. 

* Income tax provision made for the current year is added to net profit as provision creation does not lead to any cash outflow.