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1. PQ Ltd., a company newly commencing business in 2017 has the following projected Profit and Loss Account: (3) Sales 2,10,000 Cost of goods sold 1,53,000 Gross Profit 57,000 Administrative Expenses 14,000 Selling Expenses 13,000 27,000 Profit before tax 30,000 Provision for taxation 10,000 Profit after tax 20,000 The cost of goods sold has been arrived at as under: Materials used 84,000 Wages and manufacturing Expenses 62,500 Depreciation 23,500 1,70,000 Less: Stock of Finished goods 17,000 (10% of goods produced not yet sold) 1,53,000 The figure given above relate only to finished goods and not to work-in-progress. Goods equal to 15% of the year's production (in terms of physical units) will be in process on the average requiring full materials but only 40% of the other expenses. The company believes in keeping materials equal to two months' consumption in stock. All expenses will be paid one month in advance. Suppliers of materials will extend 1-1/2 months credit. Sales will be 20% for cash and the rest at two months' credit. 70% of the Income tax will be paid in advance in quarterly instalments. The company wishes to keep 8,000 in cash. 10% has to be added to the estimated figure for unforeseen contingencies. Prepare an estimate of working capital. Note: All workings should form part of the answer. Tonant