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
In the Statement of Profit and Loss, total income is revenue from operations plus other income; expenses are deducted to get profit before tax, and tax is then deducted.
Revenue from operations = ₹5,00,000 × 100/25 = ₹20,00,000
Total income = ₹20,00,000 + ₹5,00,000 = ₹25,00,000
Employee benefit expenses = 30% of ₹20,00,000 = ₹6,00,000
Profit before tax = ₹25,00,000 − ₹6,00,000 = ₹19,00,000
Tax = 40% of ₹19,00,000 = ₹7,60,000
Net profit after tax = ₹19,00,000 − ₹7,60,000 = ₹11,40,000
NCERT (2026-27 edition):
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