READ THE FOLLOWING PASSAGE AND ANSWER THE FOLLOWING QUESTION.

The profit of a company is ₹90.000 after taking into account the following items:

Calculate the operating profit of the company before its working capital changes.

₹2,00,000

The correct answer is option 2- ₹2,00,000.

Operating profit before working capital changes:
Net profit before tax and extraordinary items = ₹90,000
+ patents written off= 40,000
+ Depreciation = 40,000
+ Interest on debentures= 40,000
Total = 90,000 + 40,000 + 40,000 +40,000
        = ₹2,10,000
- profit on the sale of fixed asset = 10,000
OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES = 2,10,000 - 10,000
                                                                                           = ₹2,00,000