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Question
Read the following information and answer the given question:
Krishika alumni of IIM Ahemdabad initiated her startup Krishika Ltd. in 2018. The profits of Krishika Ltd. in the year 2019-20 after all appropriations was ₹ 31,25,000. This profit was arrived after taking into consideration the following items:
| S. No. | Particulars | Amount (₹) |
| 1. | Gain on sale of fixed tangible assets | 12,50,000 |
| 2. | Goodwill written off | 7,80,000 |
| 3. | Transfer to General Reserve | 8,75,000 |
| 4. | Provision for taxation | 4,37,500 |
Additional information:
| Particulars | 31.3.2020 (₹) | 31.3.2019 (₹) |
| Prepaid Expenses | 7,50,000 | 5,00,000 |
| Inventory | 10,50,000 | 8,20,000 |
| Trade Payable | 4,50,000 | 3,50,000 |
| Trade Receivables | 6,20,000 | 5,90,000 |
Operating profit before working capital changes will be ₹ ______.
Options
52,17,500
64,67,500
39,67,500
39,69,500
MCQ
Solution
Operating profit before working capital changes will be ₹ 39,67,500.
Explanation:
Operating profit before Working Capital changes = Net Profit before tax - Gain on sale of Fixed tangible assets + Goodwill written off
= ₹ 44,37,500 - ₹ 12,50,000 + ₹ 7,80,000
= ₹ 39,67,500
shaalaa.com
Distribution of Profit Among Partners
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