Cave Ltd. made a profit of Rs. 1,50,000 after charging depreciation of Rs. 30,000 on assets and a transfer to general reserve of Rs. 30,000 . The Good - Accountancy MCQ CUET Accountancy 2023 11 June Shift 3 2026 | ExamTest.live

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Cave Ltd. made a profit of Rs. 1, 50, 000 after charging depreciation of Rs. 30, 000 on assets and a transfer to general reserve of Rs. 30, 000 . The Goodwill amortised was Rs. 9, 000 and gain on sale of machinery was Rs. 5, 000 . Operating profit before working capital changes will be:

Solution & Step-by-step Explanation

To compute the operating profit before working capital variations, we add back non-cash and non-operating expenses and subtract non-operating incomes from the Net Profit: Net Profit after charging depreciation and reserve transfer Add: Transfer to General Reserve Add: Depreciation Add: Goodwill amortised Less: Gain on sale of machinery Operating profit before working capital changes = 1, 50, 000 = + 30, 000 = + 30, 000 = + 9, 000 = - 5, 000 = Rs. 2, 14, 000

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Cave Ltd. made a profit of Rs. 1, 50, 000 after charging depreciation of Rs. 30, 000 on assets and a transfer to general reserve of Rs. 30, 000 . The Goodwill amortised was Rs. 9, 000 and gain on sale of machinery was Rs. 5, 000 . Operating profit before working capital changes will be:

Rs. 1, 50, 000

Rs. 1, 80, 000

Rs. 2, 14, 000

Rs. 2, 19, 000

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