Read the following information and answer the questions.
| Particulars | Year 2024 Amount (₹) |
Year 2023 Amount (₹) |
| Revenue from operations | 25,00,000 | 20,00,000 |
| Other income | 1,00,000 | 5,00,000 |
| Employee benefit expenses | 60% of total revenue | 50% of total revenue |
| Other expenses | 10% of employee benefit expenses | 20% of employee benefit expenses |
| Tax rate | 50% | 40% |
Calculate the profit before tax in the year 2024.
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹8,84,000.
Revenue from operations = 25,00,000
Other income = 1,00,000
Total income = 25,00,000 + 1,00,000
= 26,00,000
Employee benefit expenses = 60% of total revenue
= 26,00,000 x 60/100
= 15,60,000
Other expenses = 10% of employee benefit expenses
= 15,60,000 x 10/100
= 1,56,000
Total expenses = 15,60,000 + 1,56,000
= 17,16,000
Profit before tax = Total income - Total expenses
= 26,00,000 - 17,16,000
= 8,84,000