Practicing Success
Read the following passage and answer the question. A company made a profit of ₹1,00,000 after charging a Depreciation of ₹20,000 and a transfer to a General Reserve of ₹30,000. The goodwill written off of ₹7,000 and the gain on the sale of Machinery was ₹3,000. |
How much amount is added to net profit to calculate the net profit before tax? |
₹10,000 ₹20,000 ₹30,000 ₹40,000 |
₹30,000 |
The correct answer is option 3- ₹30,000. Transfer reserve of 30,000 to net profit during the year makes the calculation of net profit before tax. |