$5$ Two sisters went into business buying and selling beds. Details of their transactions are as follows.

They initially bought $400$ beds at $$200$ each. At the end of six months they had sold $300$ of

the $400$ beds for $$300$ each. Unfortunately, during that time the bed manufacturer, which was

their only source of supply, had increased the price of each bed to $$240.$ To make matters worse,

a discount store had opened in the area and it was selling the same beds for $$280$ each. The sisters

found that, on average, over the six months they had incurred costs for advertising and so on which

amounted to $$20$ for each bed that was sold.

a On the basis of the information provided, calculate what the sisters' wealth was at the start of the

six months and at the end of the six months, and what profit had been made. Calculations should

be made using historic cost, replacement cost and net realisable value.

b Having calculated the profit for the first six months, discuss whether the profit figure is a useful

benchmark for measuring the performance of the business, and also whether it is useful as a

guide to future profitability.