Question

Calculate operating profit from the following:

	₹
Net Profit	5,00,000
Dividend Received	6,000
Loss on sale of Furniture	12,000
Loss by Fire	50,000
Salaries	1,20,000
Interest on Loan from Bank	10,000
Rent Received	24,000
Donation	5,100

Answer 1

$\begin{array}{l}\text{Operating Profit = Net Profit}-\text{Non-Operating Income + Non-Operating Expenses}\\ \\ \text{Non-Operating Income = Dividend Received + Rent Received}\\ \text{= 6,000 + 24,000}\\ \text{= 30,000}\\ \text{Non-Operating Expenses = Loss on Sale of Furniture + Loss by Fire + Interest on Loan + Donation}\\ \text{= 12,000 + 50,000 + 10,000 + 5,100}\\ \text{= Rs 77,100}\\ \therefore \text{Operating Profit = 5,00,000}-\text{30,000 + 77,100}\\ \text{= Rs 5,47,100}\end{array}$

Note: Salary being an operating expense was already taken into account while determining net profit, thus, it will be ignored now.