particulars: Shri Harish Gupta wishes to start a trading business and furnishes the following (i) Estimated annual sales-10,80,000 (ii) Estimated fixed expenses- 2,100 p.m.; of which depreciation amounted to 500 and estimated variable expenses chargeable to P and L Account equal 5% of sales. (iii) Expected profit on purchases - 20% (iv) Expected stock-turnover 5 times (v) The sales and purchases will occur evenly throughout the year. (vi) All purchases will be made on one month's credit. (vii) Customers will be allowed two month's credit. (viii) 25% of sales will be made against cash. (ix) Debtors may be calculated on the basis of sales. (x) A cash balance equal to one month's expenses is desired to be maintained. You are required to calculate : (a) His estimated profit for the year. (b) His average working capital requirements. [Ans. (a) 1,00,800 (b) * 2,46,100] [Note: (i) If total purchases are taken to be cost of goods sold + closing stock, then creditors for one month shall be 90,0