Reference no: EM132636781

Javier Hernandez is a sole trader who, although keeping very good records, does not  operate a full double entry. The following figures have been taken from her records.

                                31 March 2018                      31 March 2019

                                     Tshs.                                        Tshs.

Cash at bank         1,460,000                          1,740,000

Office furniture       600,000                               500,000

Inventory              2,320,000                         2,620,000

Cash in hand          60,000                              80,000

Trade Accounts Receivable on 31 March 2018 amounted to Tshs.2,980,000 and sales for the year ended 31 March 2019 to Tshs.11,520,000. During the year ended 31 March 2019 cash received from receivables amounted to Tshs.10,820,000.

Trade Accounts Payables on 31 March 2018 amounted to Tshs.1,880,000 and purchases for the year ended 31 March 2019 to Tshs.8,120,000. During the year ended 31 March 2019 cash paid to trade payables amounted to Tshs.7,780,000.

During the year to 31 March 2019 no bad debts were incurred. Also, during the same period there was neither discount allowed nor discount received.

Required:

Calculate receivables and payables as at 31 March 2019;

Question (a) calculate Javier Hernandez' capital as at 31 March 2018 and 31 March 2019;

Question (b) Calculate his net profit for the year ended 31 March 2019, allowing for the fact that during that year his drawings amounted to Tshs.2,540,000.