QUESTIO FOUR The following summary information relates to two (2) businesses Bwana and Mkubwa. Both businesses traded in the same market sector for the year ended 31 December 2020. Statement of Profit or Loss Accounts for the year ended 31 December 2020 Sales Cost of sales Gross Profit Expenses Net Profit Statement of Financial Position as at 31 December 2020 Bwana Mkubwa K K 800,000 800,000 (400,000) (360,000) 400,000 440,000 (250,000) (220,000) 150,000 220,000 Bwana Mkubwa K K K K 490,000 700,000 Fixed Assets Current Assets Inventory 50,000 100,000 Receivable 80,000 160,000 Cash at bank 170,000 Nil 300,000 260,000 Current Liabilities Payables 90,000 140,000 Bank overdraft Nil 120,000 210,000 Nil 700.000 700.000 Financed by: Opening capital Net profit 575,000 555,000 150,000 220,000 725,000 775,000