Question

Hi can someone help me in finance subject im stuck rn :((

Below are the actual and forecasted sales for the SMILE SDN BHD company’s.


Month (RM)

June 2021 550 000

July 2021 440 000

August 2021 385 000

September 2021 421 000

October 2021 392 000

November 2021 478 000

December 2021 416 000

January 2022 520 000

February 2022 509 000

March 2022 560 000


i. Customers pay cash for 70 percent of sales value and the balance will be paid in the following months after sales.

ii. SMILE SDN. BHD. purchases raw materials two (2) months in advance. The amount of raw materials needed is 40 percent of its total sales.

iii. The supplier allows payment of 60 percent in the same month in which the sales occur. The balance is to be paid one month after purchase.

iv. The company is also expected to received other cash inflows amounting to RM17, 895 in December.

v. The company makes a monthly payment of RM56, 000 for salaries ad RM11, 000 for other administrative expenses.

vi. Fix payment for rent RM20,000 per month.

vii. Ending balance for September is RM123, 000 and the company maintain RM 50,000 of its minimum cash balance per month.

viii. Interest rate of 12 percent per year if the company makes a loan.


how can i do the i,ii and iii? please someone help me :(

Answer 1

For the calculations, we can use the given information along with the following assumptions:

- There are no taxes or other expenses included in the calculations.
- Any purchases made by the company are done on credit.

i. Calculation of Cash and Credit Sales

Since 70% of the sales value is paid in cash and the balance is paid after sales, we can calculate the cash and credit sales for each month as follows:

Month Sales Cash Sales Credit Sales
Jun-21 550,000 385,000 165,000
Jul-21 440,000 308,000 132,000
Aug-21 385,000 269,500 115,500
Sep-21 421,000 294,700 126,300
Oct-21 392,000 274,400 117,600
Nov-21 478,000 334