Target Exam

CUET

Subject

-- Accountancy Part B

Chapter

Accounting Ratios

Question:

From the following details, calculate net profit before tax:

Net Profit after tax is ₹50,000

15% Long-term debt ₹12,00,000

Tax rate 20%

Options:

₹1,80,000

₹1,50,000

₹62,500

₹72,500

Correct Answer:

₹62,500

Explanation:

The correct answer is option 3- ₹62,500.

Net Profit after tax is ₹50,000

15% Long-term debt ₹12,00,000

Tax rate 20%

Profit before tax = 50,000 x 100/80
                        = ₹10,00,000
                        = 62,500