Given Net Profit After Tax (PAT) = Rs. 1,50,000 and Tax = Rs. 50,000, we need to work backwards to find Profit Before Interest and Tax (PBIT).
Finding Profit Before Tax:
Net Profit After Tax = Profit Before Tax - Tax
Rs. 1,50,000 = Profit Before Tax - Rs. 50,000
Profit Before Tax = Rs. 1,50,000 + Rs. 50,000 = Rs. 2,00,000
Finding Interest on Debentures:
Interest on 10% Debentures = 10010×4,00,000 = Rs. 40,000
Finding Profit Before Interest and Tax:
Profit Before Tax = Profit Before Interest and Tax - Interest
Rs. 2,00,000 = PBIT - Rs. 40,000
PBIT = Rs. 2,00,000 + Rs. 40,000 = Rs. 2,40,000
Note: Interest on debentures is deducted before arriving at profit, while preference dividend (12% on Preference shares) is an appropriation of profit and not deducted while calculating PBIT.
Answer: Option 3 - Rs. 2,40,000