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i. From the following calculate operating profit : 

 

Rs.

Net profit

2,00,000

Rent received

20,000

Gain on sale of machine

30,000

Interest on loans

40,000

Donation

4,000

 

ii. State whether the cost of obtaining license to carry out business is a capital or revenue expenditure.

Asked by Topperlearning User 1st July 2016, 4:01 PM
Answered by Expert
Answer:

 

  1. Operating profit = Net profit - Rent received- Gain on sale of machine + Interest on Loan- Donation (assumed it is already included in net profit)

     = 2,00,000- 20,000 -30,000 + 40,000 - 4,000

     = Rs.1,86,00
  2. It is a capital expenditure
Answered by Expert 1st July 2016, 6:01 PM
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