Question

What is the amount of purchase with the following information?
Opening stock = $Rs.3,500$
Closing stock = $Rs.1,500$
Cost of goods sold = $Rs.22,000$

• A. $Rs.20,000$
• B. $Rs.24,000$
• C. $Rs.27,000$
• D. $Rs.17,000$

Answer 1

Answer: (A)

$Rs.20,000$

This can be identified with the below equation:

Opening Stock + Purchases - Closing Stock = Cost of Goods Sold

By putting the available information:

Rs.3500 + Purchases - Rs.1500 = Rs.22000

Rs.3500- Rs.1500 + Purchases = Rs.22000

Rs.2000 + Purchases = Rs.22000

Purchases = Rs.22000 - Rs.2000

Purchases = Rs.20000