Revenue from operations is ₹40,00,000, other income is 10% of Revenue from Operations. Expenses are 40% of Revenue from Operations. Amount of Profit before Tax will be:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) - ₹ 28,00,000.
Revenue from operations = ₹40,00,000
Other income = 10% of Revenue from Operations
= 10/100 x 40,00,000
= 4,00,000
Total revenue = Revenue from operations + Other income
= 40,00,000 + 4,00,000
= ₹44,00,000
Expenses are 40% of Revenue from Operations
Expenses = 40,00,000 x 40/100
= 16,00,000
Profit before tax = Total Revenue - Expenses
= 44,00,000 - 16,00,000
= 28,00,000