Question

In a firm ,10% of net profit after deducting all adjustments ,including reserve is transferred to general reserve .The net profit after all adjustments but before transfer to general reserve is Rs.44000.calculate the amount which is to be transferred to reserve

Answer 1

Answer:

Transfer Amount = 4,000 i.e. 44,000 * 10/110

Explanation:

Answer 2

Given:

Reserve ratio = 10% of the net profit.

Profit= Rs.44,000

To find:

Amount transferred to reserve.

Solution:

Reserve ratio = 10% of the net profit.

Profit= Rs. 44,000

The net profit Rs. 44000 is net profit before transfer to the reserve and the percentage given for transferring the net profit to reserve is given as 10%.

Calculation of the amount which needs to be transferred to the reserve -

$reserve \: = \frac{10}{100} \times 44000$

$reserve = 4400$

Therefore Rs.4400 must be transferred to the reserve.