Other income of a corporate entity is Rs. 5,00,000 , which constitutes 25\% of its Revenue from Operations. Em

Question

Other income of a corporate entity is Rs. 5,00,000 , which constitutes 25\% of its Revenue from Operations. Employees Benefit Expenses are valued at 30\% of the Revenue from Operations. Assuming a tax rate of 40\% , find the Net Profit After Tax (PAT).

Accepted Answer

Step-by-step financial statement calculations:Calculate Revenue from Operations (RFO):

Other Income = 25% of RFO = Rs. 5, 00, 000

RFO = \frac{Rs. 5 , 00 , 000}{0.25} = Rs. 20, 00, 000

Calculate Total Income:

Total Income = RFO + Other Income = 20, 00, 000 + 5, 00, 000 = Rs. 25, 00, 000

Calculate Employee Benefit Expenses:

Employee Expenses = 30% of RFO = 0.30 \times 20, 00, 000 = Rs. 6, 00, 000

Calculate Profit Before Tax (PBT):

PBT = Total Income - Employee Expenses

PBT = 25, 00, 000 - 6, 00, 000 = Rs. 19, 00, 000

Calculate Tax Amount (

40%

):

Tax = 40% of 19, 00, 000 = Rs. 7, 60, 000

Calculate Net Profit After Tax (PAT):

PAT = PBT - Tax = 19, 00, 000 - 7, 60, 000 = Rs. 11, 40, 000

Other income of a corporate entity is $Rs. 5, 00, 000$ , which constitutes $25%$ of its Revenue from Operations. Employees Benefit Expenses are valued at $30%$ of the Revenue from Operations. Assuming a tax rate of $40%$ , find the Net Profit After Tax (PAT).

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Other income of a corporate entity is Rs. 5,00,000, which constitutes 25% of its Revenue from Operations. Employees Benefit Expenses are valued at 30% of the Revenue from Operations. Assuming a tax rate of 40%, find the Net Profit After Tax (PAT).