STATEMENT OF INCOME FOR THE YEAR ENDED 31 DECEMBER 2019 500,000 Pula Sales Less Cost of sales: Opening inventory Purchases Cost of goods available for sale Closing inventory Gross profit Operating expenses Net surplus for the year 120,000 415.000 535,000 (115.000) 420.000) 80,000 (40.000) 40,000 STAMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019 Pula Current assets Inventory 115.000 Receivables 133,000 Bank overdraft 124.000 Current Liabilities Payables 96,000 Capital and reserves Share capital 70,000 General reserve 110,000 Retained profit 110,000 Additional Information The receivables and payables opening balances were P50,000 each. All sales and purchases were made on credit. Page 7 of 10 Required: a. Calculate the: i. Average payment period. ii. Average age of inventory. iii. Average collection period. iv. Cash conversion cycle. (4 marks) (4 marks) (4 marks) (3 marks) b. Explain five strategies that can improve the cash conversion cycle. (10 marks)