Operating profit earned by M/s Arora & Sachdeva in 2015-16 was Rs. 17,00,000. Its non-operating incomes were Rs. 1,50,000 and non-operating expenses were Rs. 3,75,000. Calculate the amount of net profit earned by the firm

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Solution

Operating Profit
= Net Profit + Non-operating Expenses - Non-operating Income

Hence, Net Profit
= Operating Profit + Non-operating Income - Non- operating Expenditure

Operating profit (Given) = Rs. 17,00,000

Non-operating income = Rs. 1,50,000

Non-operating expenses = Rs. 3,75,000

Hence, Net profit
= Rs. 17,00,000 + Rs. 1,50,000 - Rs. 3,75,000
=Rs. 14,75,000.

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