Question

Gross profit of the firm was Rs. 1,20,000. There were salary of staff Rs. 50,000 and interest received Rs. 40,000. Net Profit will be

• A. Rs. 2,10,000
• B. Rs. 1,10,000
• C. Rs. 90,000
• D. Rs. 1,30,000

Hint:

Net Profit accounts for all incomes and expenses after calculating the Gross Profit.

Answer 1

The Correct Option is B

The formula for Net Profit is:

Net Profit = Gross Profit – Expenses + Other Income

Given: Gross Profit = Rs. 1,20,000 - Expenses (Salary) = Rs. 50,000 - Interest Received = Rs. 40,000

Net Profit = \( 1,20,000 - 50,000 + 40,000 = Rs. 1,10,000 \)