Clear this

Its simple and I like these kind a sum very much

Let Gross credit purchase is 'X'

 so the return is 1/7of X

so net credit purchase  =  gross credit purchase - return

=  X -  1/7X

= 6/7X

since given that  cash purchase is 20% of net credit purchase i.e 20% of 6/7 X = 1.2X / 7

again  given that Total purchase  is 432000

therefore,  

gross purchase  + cash purchase =  X + 1.2/7 X  =432000

X = 368780.48 approx   i.e. the gross purchase

Assume ur Credit purchases to be 1x on total purchases and so returns wld be 0.1428x so net credit purchases is 0.8571x and ur cash purchses is 20% on net credit purchase which wld come to 0.1714x So ur total Purchases wld be 1x(credit purchase) + 0.1714x(Cash purchase)=1.1714x.

Therefore ur gross credit purchase wld be 43200/1.1714*1=36878

and cash purchase 43200/1.1714*0.1714=6392

Total purchases of = 43,200

Assuming the total purchases are net of returns

 Let Net credit purchases be 'x', therefore total purchases will be x+.2x

therefore 432000=1.2x

x=360000

net purchases are 6/7th of gross credit purchases

thus gross credit purchases are 420000.

agreed with manmohan & sapna....answer will be approx Rs. 368780 taking in round figure !!

very clearly explained by manmohan........

Agree with manmohan it is 368780 Rs.