Other income is ₹5,00,000 which is 25% of Revenue from operations. Employee benefit Expenses are 30% of the Revenue from operation. Tax rate is 40%. Net profit after tax will be:
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹11,40,000.
Other income is ₹5,00,000 which is 25% of Revenue from operations, means
If other income is ₹25 then Revenue from operations is ₹100
If other income is ₹5,00,000 then Revenue from operations = 100/25 X 5,00,000
= ₹20,00,000
Employee benefit expenses is 30% of revenue from operations means
Employee benefit expenses = 20,00,000 x 30/100
= ₹6,00,000
| Particulars | Amount (₹) |
| Revenue from operations | 20,00,000 |
| Add: other income | 5,00,000 |
| Total income | 25,00,000 |
| Less: employee benefit expenses | 6,00,000 |
| Profit before tax | 19,00,000 |
| Less: tax @40% | 7,60,000 |
| Profit after tax | 11,40,000 |
Thus, profit after tax is 11,40,000.