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Profit after tax… (Class 12 Accountancy SQP 2024-25, Q33b)

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AccountancyCBSE Class 12 · Sample paper, session 2024-25 · 4 marks · Very short answer

CBSE Class 12 Accountancy sample paper 2024-25: question 33(b)

From the official CBSE sample question paper for 2024-25, section B-I, question 33(b), for 4 marks. Try it first; the hints and our step-by-step solution are below.

Q33(b) · 4 marks · Very short answerAccounting Ratios

Profit after tax amounted to ₹ 6,00,000, and tax rate was 20%. If earnings before interest and tax was ₹ 10,00,000 and Nominal Value of Debentures amounted to ₹ 25,00,000 (assuming the only debt of the company), determine the rate of interest on debentures

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2024-25.

Hints

Open one hint at a time and try again before the next.

Hint 1

Profit after tax is 80% of profit before tax.

Hint 2

EBIT − interest = profit before tax.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Tax at 20% means profit after tax is 80% of profit before tax: PBT = ₹ 6,00,000 / 0.8 = ₹ 7,50,000; tax = ₹ 1,50,000.

    1½ marks

  2. Interest = EBIT − PBT = ₹ 10,00,000 − ₹ 7,50,000 = ₹ 2,50,000.

    1½ marks

  3. Rate of interest = ₹ 2,50,000 / ₹ 25,00,000 × 100 = 10%.

    1 mark

Answer: Interest ₹ 2,50,000; rate of interest on debentures 10%

Where the marks are

  • Tax ₹ 1,50,000 / PBT ₹ 7,50,000 (1½ marks)
  • Interest ₹ 2,50,000 (1½ marks)
  • Rate 10% (1 mark)

Revise the chapter

  • Chapter: Accounting Ratios (notes, formulas, where marks are lost and every past question)
Practise this chapterBoard-style questions from Accounting Ratios, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2024-25: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.