On $1$ January $207$ Giles starts his own business by investing $8,000$ of his own money and getting a business contact to lend the business $2,000$ for $5$ years, on which interest will be paid at $5\%$ p$.$a$.$ Giles rents an office space and pays $1,000$ for furniture and equipment. During the first year the business purchases goods for resale for $6,000,$ of which $5,500$ had been paid by $31$ December $20$X$7.$ The business makes sales of $5,000$ on credit and $1,500$ for cash, and Giles's credit customers have paid $4,000$ by $31$ December $207.$ Office running costs paid during the year total $2,200,$ and Giles takes $1,000$ out of the business for personal expenses. At the year end goods which had cost $2,000$ are still on hand.