The controller of Optimum wishes to improve the companys control system by preparing a monthly cash budget. The following information relates to the month ending July 31, 2021:

June 30, 2021, cash balance	$	98,000
Dividends were declared on June 15*		28,000
Cash expenditures to be paid in July for operating expenses		75,600
Depreciation expense		9,800
Cash collections to be received		182,000
Merchandise purchases to be paid in cash		114,400
Equipment to be purchased for cash		42,200
Optimum wishes to maintain a minimum cash balance of		38,000

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

Required:

1. Prepare a cash budget for the month ending July 31, 2021, indicating how much, if anything, Optimum will need to borrow to meet its minimum cash requirement. (Leave no cells blank - enter "0" wherever required).

2. Which of the following statement is true?

(Click to select) The income statement allows cash shortfalls and cash surpluses to be predicted Cash budgeting is not required for not-for-profit sectors Accuracy is required when preparing budgets Cash budgets are not part of financial budgets The balance sheet budget is prepared after the preparation of the cash budget