Read the following information about a Non profit organisation for the year ended 31st March,2019 and answer the question.
Creditors for stationery on 1st April,2018 = ₹4,600
Creditors for stationery on 31st march,2019 = ₹11,800
Opening stock of stationery = ₹15,000
Closing stock of stationery = ₹30,400
During the year ₹56,800 is paid to creditors.
Stationery purchased in cash during the year was 20% of the total purchase of stationery.
Calculate the total purchases of the organisation.
Answer & explanation
Correct answer: option 4
The correct answer is option 4- ₹80,000.
Let the total purchases is x
Cash purchases is 20% of x means x/5
Credit purchases is 80% of x means 4x/5
x/5 + 64,000 = x
x- x/5 = 64,000
4x/5 = 64,000
x = 64,000 X 5/4
= ₹80,000
Total purchases is 80,000.
CREDITORS ACCOUNT
| PARTICULARS | AMOUNT (₹) | PARTICULARS | AMOUNT (₹) |
| To Bank A/c (Payment to creditors) |
56,800 | By balance b/d | 4,600 |
| By balance c/d | 11,800 | By purchases (balancing fig) |
64,000 |
| 68,600 | 68,600 |