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.

What will be the amount of cash purchases of stationery?

₹16,000

The correct answer is option 2- ₹16,000.

Payment made to creditors = 56,800
Add: closing creditors = 11,800
Less: Opening creditors = 4,600
Stationery purchased on credit = 56,800 + 11,800 - 4,600
                                                    = 64,000

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
4x/5 = 64,000
x = 64,000 X 5/4
  = ₹80,000

Cash purchases = Total purchases - credit purchases
                          = 80,000 - 64,000
                          = ₹16,000