Example cash budget for each of the months October, November and December for the Veggie Patch Company

The following assumptions regarding the budget are as follows;

Cash sales are 30% and credit sales are 70% of the business

Collection of the credit sales are 30% in the month of sale, 40% in the next month and 20% in the second month after the sale. 10% of the sales are not collectable.

Credit sales for August are $70,000

Commission expenses, 40% will be paid in the month that they were incurred and 60% will be paid in the following month.

25% of the wages expense will be paid in the month that incurred and 75% will be paid one month later. Insurance was prepaid for the upcoming year on August.

Rent and utilities are paid in the month that they were incurred.

The cash balance on the 30 September was $20,000.