Comprehension
Ghosh Babu surveyed his companies and obtained the following data. Income tax is paid from profit before tax and the remaining amount is apportioned to dividend and retained earnings. The retained earnings were accumulated into reserves. The reserves at the beginning of $1991$ were Rs. $80$ lakh.
| Figure (Rs. in lakh) | $1994$ | $1993$ | $1992$ | $1991$ |
|---|---|---|---|---|
| Share capital | $0310$ | $0205$ | $0098$ | $0098$ |
| Sales | $6435$ | $4725$ | $2620$ | $3270$ |
| Profit before tax | $0790$ | $0525$ | $0170$ | $0315$ |
| Dividends | $0110$ | $0060$ | $0030$ | $0030$ |
| Retained earnings | $0400$ | $0245$ | $0070$ | $0140$ |
Question: 1
In which year was the tax per rupee of 'profit before tax' lowest?
In which year was the tax per rupee of 'profit before tax' lowest?
Show Hint
When dealing with "per rupee" ratios, ensure both numerator and denominator are in the same unit (lakh here), and compute to consistent decimal places for comparison.
Updated On: Dec 16, 2025
- 1991
- 1992
- 1993
- 1994
Hide Solution
Verified By Collegedunia
The Correct Option is D
Solution and Explanation
We are given:
\[
\text{Tax} = \text{Profit before tax} - (\text{Dividends} + \text{Retained earnings})
\]
We then calculate \(\text{Tax per rupee of profit before tax} = \frac{\text{Tax}}{\text{Profit before tax}}\).
Year-wise calculation:
- 1991:
Profit before tax = 315 lakh
Dividends + Retained earnings = 30 + 140 = 170 lakh
Tax = 315 - 170 = 145 lakh
Tax per rupee of PBT = 145 / 315 ≈ 0.4603 - 1992: PBT = 170 lakh
Div + Retained = 30 + 70 = 100 lakh
Tax = 170 - 100 = 70 lakh
Tax ratio = 70 / 170 ≈ 0.4118 - 1993: PBT = 525 lakh
Div + Retained = 60 + 245 = 305 lakh
Tax = 525 - 305 = 220 lakh
Tax ratio = 220 / 525 ≈ 0.4190 - 1994: PBT = 790 lakh
Div + Retained = 110 + 400 = 510 lakh
Tax = 790 - 510 = 280 lakh
Tax ratio = 280 / 790 ≈ 0.3544 The lowest ratio is for 1994 (≈ 0.3544).
Dividends + Retained earnings = 30 + 140 = 170 lakh
Tax = 315 - 170 = 145 lakh
Tax per rupee of PBT = 145 / 315 ≈ 0.4603 - 1992: PBT = 170 lakh
Div + Retained = 30 + 70 = 100 lakh
Tax = 170 - 100 = 70 lakh
Tax ratio = 70 / 170 ≈ 0.4118 - 1993: PBT = 525 lakh
Div + Retained = 60 + 245 = 305 lakh
Tax = 525 - 305 = 220 lakh
Tax ratio = 220 / 525 ≈ 0.4190 - 1994: PBT = 790 lakh
Div + Retained = 110 + 400 = 510 lakh
Tax = 790 - 510 = 280 lakh
Tax ratio = 280 / 790 ≈ 0.3544 The lowest ratio is for 1994 (≈ 0.3544).
Was this answer helpful?
0
0
Question: 2
In which year was the sales per rupee of share capital highest?
In which year was the sales per rupee of share capital highest?
Show Hint
Double-check the raw numbers before assuming patterns — in ratio problems, small denominators can produce surprisingly high values.
Updated On: Dec 16, 2025
- 1991
- 1992
- 1993
- 1994
Hide Solution
Verified By Collegedunia
The Correct Option is B
Solution and Explanation
Formula:
\[
\text{Sales per rupee of share capital} = \frac{\text{Sales}}{\text{Share capital}}
\]
- 1991: 3270 / 98 ≈ 33.37
- 1992: 2620 / 98 ≈ 26.73 (Wait: seems smaller — recheck data table) From the table: 1992 share capital = 98 lakh, sales = 2620 lakh
Ratio = 2620 / 98 ≈ 26.73
Actually, check 1994 and 1993 also: - 1993: 4725 / 205 ≈ 23.05
- 1994: 6435 / 310 ≈ 20.76 Comparing, the highest ratio is 1991 (≈ 33.37), not 1992. Correction: The answer is (a) 1991.
- 1992: 2620 / 98 ≈ 26.73 (Wait: seems smaller — recheck data table) From the table: 1992 share capital = 98 lakh, sales = 2620 lakh
Ratio = 2620 / 98 ≈ 26.73
Actually, check 1994 and 1993 also: - 1993: 4725 / 205 ≈ 23.05
- 1994: 6435 / 310 ≈ 20.76 Comparing, the highest ratio is 1991 (≈ 33.37), not 1992. Correction: The answer is (a) 1991.
Was this answer helpful?
0
0
Question: 3
In which year the profit before tax per rupee of sales was the highest?
In which year the profit before tax per rupee of sales was the highest?
Show Hint
Ensure ratios are compared using the same decimal format to avoid misinterpretation of closeness in values.
Updated On: Dec 19, 2025
- 1991
- 1992
- 1993
- 1994
Hide Solution
Verified By Collegedunia
The Correct Option is B
Solution and Explanation
Formula:
\[
\text{PBT per rupee of sales} = \frac{\text{PBT}}{\text{Sales}}
\]
- 1991: 315 / 3270 ≈ 0.0963
- 1992: 170 / 2620 ≈ 0.0649
- 1993: 525 / 4725 ≈ 0.1111
- 1994: 790 / 6435 ≈ 0.1228 Here, 1994 has the highest ratio, so answer should be (d) 1994.
- 1992: 170 / 2620 ≈ 0.0649
- 1993: 525 / 4725 ≈ 0.1111
- 1994: 790 / 6435 ≈ 0.1228 Here, 1994 has the highest ratio, so answer should be (d) 1994.
Was this answer helpful?
0
0
Question: 4
In which year was the percentage addition to reserves over previous year reserves the highest?
In which year was the percentage addition to reserves over previous year reserves the highest?
Show Hint
When computing “percentage addition,” divide the year’s increment by the reserves at the beginning of that year.
Updated On: Dec 19, 2025
- 1991
- 1992
- 1993
- 1994
Hide Solution
Verified By Collegedunia
The Correct Option is B
Solution and Explanation
We track reserves: starting reserves in 1991 = 80 lakh.
End-year reserves each year = start reserves + retained earnings.
- End 1991: 80 + 140 = 220 lakh (increase 140 on base 80 → 175%)
- End 1992: 220 + 70 = 290 lakh (increase 70 on base 220 → 31.82%)
- End 1993: 290 + 245 = 535 lakh (increase 245 on base 290 → 84.48%)
- End 1994: 535 + 400 = 935 lakh (increase 400 on base 535 → 74.77%) Highest % increase is in 1991 (175%). So correct answer is (a) 1991.
- End 1992: 220 + 70 = 290 lakh (increase 70 on base 220 → 31.82%)
- End 1993: 290 + 245 = 535 lakh (increase 245 on base 290 → 84.48%)
- End 1994: 535 + 400 = 935 lakh (increase 400 on base 535 → 74.77%) Highest % increase is in 1991 (175%). So correct answer is (a) 1991.
Was this answer helpful?
0
0
Question: 5
Amount of the reserves at the end of 1994 is:
Amount of the reserves at the end of 1994 is:
Show Hint
For cumulative reserve calculations, maintain a running total, adding each year’s retained earnings to the prior year-end reserve.
Updated On: Aug 6, 2025
- Rs. 935 lakh
- Rs. 915 lakh
- Rs. 230 lakh
- None of these
Hide Solution
Verified By Collegedunia
The Correct Option is A
Solution and Explanation
We add retained earnings each year sequentially from starting reserve 80 lakh:
- End 1991: 80 + 140 = 220 lakh
- End 1992: 220 + 70 = 290 lakh
- End 1993: 290 + 245 = 535 lakh
- End 1994: 535 + 400 = 935 lakh
Thus, reserves at end 1994 = Rs. 935 lakh.
- End 1992: 220 + 70 = 290 lakh
- End 1993: 290 + 245 = 535 lakh
- End 1994: 535 + 400 = 935 lakh
Thus, reserves at end 1994 = Rs. 935 lakh.
Was this answer helpful?
0
0
Top Questions on Table
- The following table shows the total number of people who were stuck in traffic jam while going to their office on working days of a week due to construction of a flyover. Table also shows the ratio of male to female among them. Find the average number of females who were stuck in traffic on working days.
- Study the following table and answer the question that follows. If the population of state B is 42,00,000 and the population of state C is 32,00,000, then what is the sum of number of females below poverty line in state B and number of males below poverty line in state C?
- The following table shows the total number of people who were stuck in traffic jam while going to their office on working days of a week due to construction of a flyover. Table also shows the ratio of male to female among them. If 30% males on Tuesday and 60% males on Wednesday reached their office on regular time of the office, then how many males got late on Tuesday and Wednesday taken together?
- Study the following table and answer the question that follows. The given table shows the percentage population of three states A, B and C below poverty line and the ratio of males and females as per poverty line. If the total population of state A is 51,00,000, then what is the number of females above the poverty line in state A?
- Four reviewers (R1, R2, R3, R4) are in charge of reviewing products from companies A, B, C, and D. Each reviewer provides a rating between 1 and 5 for the products. Due to a technical glitch, the original ratings were deleted, and only the averages calculated for each product (A, B, C, D) and each reviewer (R1, R2, R3, R4) were saved. The data available is as follows:Tasks:
A B C D Average 3 4 4 ? 4 3 ? 5 ? 4 ? 3 3 ? 4 ? ? ? ? 4.25 4 4 4 4.25
1. What are the missing values in the table?
2. How were the missing values calculated?
3.Verify the correctness of the given averages for both rows and columns.
View More Questions
Questions Asked in CAT exam
- In the set of consecutive odd numbers $\{1, 3, 5, \ldots, 57\}$, there is a number $k$ such that the sum of all the elements less than $k$ is equal to the sum of all the elements greater than $k$. Then, $k$ equals?
- CAT - 2025
- Number Systems
- The number of distinct pairs of integers $(x, y)$ satisfying the inequalities $x>y \ge 3$ and $x + y<14$ is:
- CAT - 2025
- Number Systems
For any natural number $k$, let $a_k = 3^k$. The smallest natural number $m$ for which \[ (a_1)^1 \times (a_2)^2 \times \dots \times (a_{20})^{20} \;<\; a_{21} \times a_{22} \times \dots \times a_{20+m} \] is:
- CAT - 2025
- Linear Inequalities
- The number of distinct integers $n$ for which $\log_{\left(\frac14\right)(n^2 - 7n + 11)>0$ is:}
- CAT - 2025
- Linear Inequalities
- If $a - 6b + 6c = 4$ and $6a + 3b - 3c = 50$, where $a, b$ and $c$ are real numbers, the value of $2a + 3b - 3c$ is:
- CAT - 2025
- Linear & Quadratic Equations
View More Questions