Read the following information to answer.
Rathi Udyog, made a profit of 72,000 after charging depreciation of Rs. 17,000 on fixed assets and paid Rs. 10,000 as interim dividend. The goodwill amortized was Rs. 12,000 and profit (Gain) on sale of furniture was Rs. 2,500.
The other informations were :
Trade Payable showed an increase of Rs. 7,000.
Outstanding expenses showed a decrease of Rs. 5,000.
Accrued Income showed an increase of Rs. 8,000.
Trade payable showed a decrease of Rs. 10,000.
Inventories showed a decrease of Rs. 3,000.
On the basis of above information answer the following questions.
Find out Net Profit before tax from the above informations :
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs. 82,000
The profit of Rs. 72,000 is what is left after paying the interim dividend. A dividend is an appropriation of profit, paid out of the profit already earned, and it is a financing outflow. So it is added back to find the net profit before tax. No tax is given, so nothing else is added.
Profit given = Rs. 72,000
Add: Interim dividend paid = Rs. 10,000
Net profit before tax = Rs. 72,000 + Rs. 10,000 = Rs. 82,000
Depreciation, goodwill amortised and the gain on sale of furniture are adjusted in the next step, to reach the operating profit before working capital changes. They are not part of the net profit before tax.
NCERT (2026-27 edition): |