Prepare the Income Statement of ABC Pvt. Ltd. for year ended 31 March 2026 (all amounts in ₹ thousands) and compute the Net profit after tax. The data: Turnover ₹10,40,000; Cost of sales ₹6,80,000; Selling and administrative expenses ₹1,60,000; Depreciation ₹25,000; Interest expense ₹20,000; Dividend received ₹5,000; Tax rate 30%.

Step-by-step solution

1. Compute gross profit: $10,40,000-6,80,000=3,60,000$
2. Compute operating profit: $3,60,000-1,60,000=2,00,000$
3. Compute profit before tax: $2,00,000-25,000=1,75,000$
4. Add dividend received: $1,75,000+5,000=1,80,000$
5. Subtract interest expense: $1,80,000-20,000=1,60,000$
6. Compute tax: $1,60,000\times 30$
7. Compute net profit after tax: $1,60,000-48,000=1,12,000$

Concept tested: Income Statement construction

Published 4 October 2026 · How this solution was prepared and checked