Question

xyz ltd. has a revenue of rs. 800000 and it has provided for depreciation at 10% SLM method. it has cash expenses of rs.200000. the taxes are 50%p.a. show the net earning on accounting approach basis and cash flow basis

Answer 1

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Answer 2

Revenue =  800000

Depreciation = 10% of revenue

                     = 10 X 800000 / 100

                     = 80000

=Revenue - Depreciation

= 800000 - 80000

= 720000

Cash Expenses = 200000

= Revenue - Expense

= 720000 - 200000

= 520000

Taxes = 50%

= 520000 X 50%

Net Earning = 260000