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Calculate the net profit as per Section 198 of the Companies Act, 2013, given a starting profit of ₹2,50,000 and depreciation adjustments.
Accounting
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To solve , we first need to calculate the net profit as per Section 198 of the Companies Act, 2013.
Step 1: Calculate the Net Profit as per Section 198.
The given profit is ₹ 2,50,000 after certain adjustments. We need to reverse these adjustments and apply the rules for calculating net profit for managerial remuneration.
- Starting Profit (after adjustments): ₹ 2,50,000
- Depreciation: The profit was calculated after deducting ₹ 47,800. For managerial remuneration, only ₹ 32,800 (admissible as per income tax rules) should be deducted.
- Add back depreciation charged:
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