Read the following information to answer.
On the basis of case study given below, answer the question which follows:
"Mikku on alumni of IIT Delhi initiated his start-up "Gajanan Lid.," in the year 2016. His profit in the year 2020-21 after all appropriation was ₹6,25,000. This profit was arrived after taking the following items into consideration:
| Loss on Sale of fixed Assets |
₹5,00,000 |
| Goodwill written off |
₹3,80,000 |
| Transfer to reserve |
₹3,55,000 |
| Provision for tax |
₹2,70,000 |
| Interest on Debentures paid |
₹1,65,000 |
| Particulars |
2020(₹) |
2021(₹) |
| Prepaid Expenses |
25,000 |
10,000 |
| Accrued interest |
40,000 |
68,000 |
| Trade payables |
7,00,000 |
4,00,000 |
| Inventories |
6,50,000 |
5,50,000 |
|
