Prepare the Income Statement for the year ended 31 March 2026 and compute Net profit after tax. Turnover ₹15,00,000; Cost of sales ₹10,50,000; Selling and administrative expenses ₹1,80,000; Depreciation ₹55,000; Interest expense ₹65,000; Dividend received ₹18,000; Tax rate 32%.

Step-by-step solution

1. Calculate gross profit: Turnover ₹15,00,000 – Cost of sales ₹10,50,000 = ₹4,50,000.
2. Deduct selling and admin expenses ₹1,80,000 → ₹2,70,000.
3. Deduct depreciation ₹55,000 → ₹2,15,000.
4. Deduct interest expense ₹65,000 → ₹1,50,000.
5. Add dividend received ₹18,000 → ₹1,68,000.
6. Compute tax: 32% of ₹1,68,000 = ₹53,760.
7. Subtract tax from profit before tax to obtain Net profit after tax ₹1,14,240.

Concept tested: Net profit after tax calculation

Published 16 October 2026 · How this solution was prepared and checked