Question

From the following figures, calculate operating profit.
$\begin{array}{cc}& \text{Rs.}\\ \text{Net profit}& 1,00,000\\ \text{Rent received}& 10,000\\ \text{Gain on sale of machine}& 15,000\\ \text{Interest on loan}& 20,000\\ \text{Donation}& 2,000\end{array}$

Answer 1

Operating Profit
= Net Profit - Non-operating Income + Non-operating Expenses = Rs. 1,00,000 - Rs.25,000 + Rs.22,000
= Rs.97,000

Working Notes:
a. Non-operating Income
= Rent Received + Gain on Sale of Machine
= Rs. 10,000+ Rs. 15,000
= Rs. 25,000

b. Non-operating Expenses
= Interest on Loan + Donation
= Rs. 20,000 + Rs. 2,000
= Rs. 22,000