A firm earns a profit in last three years as follows:2020 - 21 Rs. 75,0002019 - 20 Rs. 1,20,0002018 - 19 Rs. 50,000Additional Information:Closing stock of 2020 - 21 was undervalued by Rs. 10,000.Calculate the Average Profit.

The profit for the year 2020-21 needs to be adjusted. An undervalued closing stock reduces the gross profit, so it must be added back. Adjusted profit for 2020-21 = 75,000 + 10,000 = 85,000.Total profit = 85,000 + 1,20,000 + 50,000 = 2,55,000.Average Profit = 2,55,000 / 3 = Rs. 85,000.