Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

Calculate Profit/Loss from following.

 Revenue from operation

 ₹60,00,000 

 Other income

 ₹1,50,000

 Income tax

 35%

 Employees benefit expense 

 ₹4,00,000

 Other expenses

 ₹40,00,000 

 

Options:

₹21,50,000

₹13,97,500

₹17,50,000

₹11,37,500

Correct Answer:

₹11,37,500

Explanation:

The correct answer is Option (4) - ₹11,37,500.

Total revenue = Revenue from operations + Other income
                    = 6000000 + 150000
                    = 6150000

Total expenses = Employees benefit expense + Other expenses
                      = 4000000 + 400000
                      = 4400000

Profit before tax = Total revenue - Total expenses
                        = 6150000 - 4400000
                        = 1750000

Income tax = 35%
Income tax = 1750000 x 35/100
                 = 612500

Profit after tax = Profit before tax - Income tax
                     = 1750000 - 612500
                     = 1137500