Prepare the Income Statement for the year ended 31 March 2026 (all amounts in ₹ thousands) using the following data and calculate the Net profit after tax: Turnover = 13,00,000 Cost of sales = 8,20,000 Selling and administrative expenses = 1,40,000 Depreciation = 45,000 Interest expense = 55,000 Dividend received = 12,000 Tax rate = 28%

Step-by-step solution

1. Calculate Gross Profit: Turnover – Cost of sales = 13,00,000 – 8,20,000 = 4,80,000.
2. Deduct selling & administrative expenses: 4,80,000 – 1,40,000 = 3,40,000.
3. Deduct depreciation: 3,40,000 – 45,000 = 2,95,000 (Operating Profit).
4. Add non‑operating income (dividend received): 2,95,000 + 12,000 = 3,07,000.
5. Deduct interest expense: 3,07,000 – 55,000 = 2,52,000 (Profit before tax).
6. Compute tax: 28% of 2,52,000 = 0.28 × 2,52,000 = 70,560.
7. Subtract tax from profit before tax: 2,52,000 – 70,560 = 1,81,440.
8. Thus Net profit after tax = ₹1,81,440.

Concept tested: Preparation of profit and loss account

Published 28 September 2026 · How this solution was prepared and checked