The controller of Arrowroot Company wishes to improve the company’s control system by preparing a monthly cash budget. The following information relates to the month ending July 31, 20X1:

June 30, 20X1, cash balance..................................................................................$ 90,000
Dividends to be declared on June 15*....................................................................24,000
Cash expenditures to be paid in July for operating expenses.............................73,600
Depreciation expense.................................................................................................9,000
Cash collections to be received.............................................................................178,000
Merchandise purchases to be paid in cash..........................................................112,400
Equipment to be purchased for cash......................................................................41,000
Arrowroot Company wishes to maintain a minimum cash balance of...............30,000

Required:

1. Prepare a cash budget for the month ended July 31, 20X1, indicating how much, if anything, Arrowroot will need to borrow to meet its minimum cash requirement.

2. Explain how cash budgeting can facilitate cash management at Arrowroot.