Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:

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:

Options:

₹10,25,000

₹11,40,000

₹10,75,000

₹10,35,000

Correct Answer:

₹11,40,000

Explanation:

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 ₹500000 then Revenue from operations =100/25 X 500000
                                                                                    = ₹2000000
Employee benefit expenses is 30% of revenue from operations means
Employee benefit expenses are 2000000 x 30/100
                                           = ₹600000

Particulars Amount (₹)
Revenue from operations 2000000
Add: other income 500000
Total income 2500000
Less: employee benefit expenses 600000
Profit before tax 1900000
Less: tax @40% 760000
Profit after tax 1140000