Q85 BPP

This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.

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September 23, 2020 at 10:33 am #586452
alexandr1988
Member
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Dear, here is the task

Inventory = 2149
AR = 3200
Current Assets = 5394

AP = 2865
Overdraft = 1500
Current Liab. = 4365

In answers Net working capital is calculated as 5394 – 4365 = 984;
but in my understanding we should to exclude the Overdraft and it should be 5394-2865 = 2529

Am I wrong? or BPP has error?
September 23, 2020 at 3:57 pm #586469
John Moffat
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The BPP answer is correct.

Working capital is current assets less current liabilities, and an overdraft is a current liability.
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