Exercise 22-16 a

The controller of Pharoah Company wants to improve the companys control system by preparing a month-by-month cash budget. The following information is for the month ending July 31, 2020.

June 30, 2020, cash balance $43,700

Dividends to be declared on July 15* 14,100

Cash expenditures to be paid in July for operating expenses 36,900

Amortization expense in July 4,300

Cash collections to be received in July 82,400

Merchandise purchases to be paid in cash in July 56,700

Equipment to be purchased for cash in July 21,000

*Dividends are payable 30 days after declaration to shareholders of record on the declaration date.

Pharoah Company wants to keep a minimum cash balance of $29,400.

(a) Prepare a cash budget for the month ended July 31, 2020, and indicate how much money, if any, Pharoah Company will need to borrow to meet its minimum cash requirement.