waldziuchna

You can look at it from the standpoint of a businessman who sells some sort of items. At the beginning of the period (say a day), you start out with some items, during the course of the day, you bought additional items, and at the end of the day, you still have some items left unsold. How do you calculate the cost of items sold? It is simply adding the beginning stock of items to what you bought during the day and deducting the items left unsold. Now you have 4 things to consider: beginning inventory, purchases, ending inventory and cost of goods sold. If you are given 3 out of the 4 items. It is very simple to determine the 4th item by solving for the unknown.

Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold.

Therefore,

Purchases = Cost of Goods Sold + Ending Inventory - Beginning Inventory

Purchases = 80k + 10k - 14k
Purchases = 76k.