Revenue from operations Rs. 4,00,000; Cost of Revenue from Operations 60% of Revenue from Operations; Operating expenses of Rs. 30,000 and rate of income tax is 40%. What will be the amount of profit after tax
Question
Revenue from operations Rs. 4,00,000; Cost of Revenue from Operations 60% of Revenue from Operations; Operating expenses of Rs. 30,000 and rate of income tax is 40%. What will be the amount of profit after tax
Solution
To calculate the profit after tax, we need to follow these steps:
Step 1: Calculate the cost of revenue from operations. Given that the cost of revenue from operations is 60% of the revenue from operations, we can calculate it as follows: Cost of Revenue from Operations = 60% * Revenue from Operations Cost of Revenue from Operations = 60% * Rs. 4,00,000 Cost of Revenue from Operations = Rs. 2,40,000
Step 2: Calculate the gross profit. Gross Profit = Revenue from Operations - Cost of Revenue from Operations Gross Profit = Rs. 4,00,000 - Rs. 2,40,000 Gross Profit = Rs. 1,60,000
Step 3: Calculate the net profit before tax. Net Profit Before Tax = Gross Profit - Operating Expenses Net Profit Before Tax = Rs. 1,60,000 - Rs. 30,000 Net Profit Before Tax = Rs. 1,30,000
Step 4: Calculate the amount of income tax. Income Tax = Rate of Income Tax * Net Profit Before Tax Income Tax = 40% * Rs. 1,30,000 Income Tax = Rs. 52,000
Step 5: Calculate the profit after tax. Profit After Tax = Net Profit Before Tax - Income Tax Profit After Tax = Rs. 1,30,000 - Rs. 52,000 Profit After Tax = Rs. 78,000
Therefore, the amount of profit after tax will be Rs. 78,000.
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