How To Calculate Credit Purchases From Income Statement
How To Calculate Credit Purchases From Financial Statements Firstly, you can calculate Purchases from Income Statement by using the Cost of Sales Formula , and then you can easily calculate Credit Purchases if Cash Purchases is given. We know that Cost of Sales Formula is: Cost of Sales = Opening Inventory + Total Purchases - Closing Inventory Let’s us understand the computation of Credit Purchases with the below examples: Example 1. Here Cost of Goods Sold = Rs. 120000, Opening Inventory = Rs. 9000, Closing Inventory = Rs. 11000, Cash Purchases = Rs. 48800, Credit Purchases = ? Putting the values, we have: 120000 = 9000 + 48800 + Credit Purchases - 11000 ...