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how to prepare a cash budget

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The company predicts that 4 percent of its credit sales will never be collected, 40 percent of its sales will be collected in the month of the sale, and the remaining 56 percent will be collected in the following month. Credit purchases will be paid for in the month following the purchase. In September credit sales were $7,500,000 and credit purchases were $3,500,000. The ending cash balance for September was $12,000,000. Using this information, complete a cash budget for Acme for the three months above, with the ending cash balance for each month clearly shown.

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