Aglow Ltd commenced business with $15,000 in May 2018, when the cost of inventory was $5/unit. Aglow Ltd used all its cash to purchase inventory. All the inventory was sold during the month for $10/unit. At the end of May, the cost of inventory is $7/unit.

Required:

a) Applying financial capital, calculate the holding gain or loss on inventory.

b) Applying physical capital, calculate the minimum amount of capital that should be retained in the business.