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Sir I have a doubt in part (B) in calculating the current ratio
Here 3945+8219/3616+overdraft =1.4 =$5. 073In this part I did not get the required answer pls explain this equation briefly how we get $5.073
The answer does not say that the current ratio = $5,073 (that would be impossible!!!). The current ratio is given in the question and is 1.4.
It is saying that after solving the simple algebra, then the overdraft is $5,073.
The current ratio = (3,945 + 8,219) / (3,616 + overdraft) = 1.4
Therefore (3,945 + 8,219) = 1.4 (3,616 + overdraft)
Therefore (3,945 + 8,219) / 1.4 = 3,616 + overdraft
Therefore 8,689 = 3,616 + overdraft
Therefore overdraft = 8,689 – 3,616 = 5,073
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