It is common to read news reports that many Canadians have big debt loads and negative cash flows. Assume you are a student enrolled in your second year of university and have just learned about the importance of managing cash flows and how to prepare a cash flow statement. You want to use your knowledge to prepare a cash budget for the upcoming year, September 1, 2017, to August 31, 2018. To help you prepare next year's cash budget, you have prepared a cash flow statement for the past year, September 1, 2016, to August 31, 2017.

Instructions
(a) Comment on your cash position on August 31, 2017, compared with September 1, 2016.
(b) Prepare a cash flow forecast for September 1, 2017, to August 31, 2018, based on the following estimates and assumptions:
1. Tuition and books $7,500
2. Student loan $7,500
3. Your parents will contribute $4,000 toward your rent, utilities, cable, and Internet. You will not have to pay your parents back for this contribution.
4. Rent, utilities, cable, and Internet $4,000
5. Groceries $3,600
6. Gas, insurance, and parking $4,600
7. Clothes $3,000
8. Miscellaneous $500
9. You plan to pay off the amount owed on your credit card right away.
10. Your parents will lend you an additional $1,500 if you need it.
11. You are pretty sure that you will be rehired by the same company next summer; however, you do not think you will get a raise in pay.
(c) What is the amount of cash you forecast you will have at August 31, 2018?
(d) Will you need to borrow the additional $1,500 from your parents?
(e) Will you be able to pay off the $1,000 owed on your credit card? Should you try to do so?
(f) What actions may you be able to take to improve your cash flow?

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MY CASH FLOW STATEMENT Year Ended August 31, 2017 Operating Activities Cash received from summer job Cash contribution from parents Cash paid for rent, utilities, cable, Internet Cash paid for groceries Cash paid for clothes Cash paid for gas, insurance, parking Cash paid for miscellaneous Cash paid for interest on credit card $ 8,000 3,600 (4,000) (3,200) (3,000) (4,420) (500) (180) (3,700 Cash used in operating activities Investing Activities (7,000) 1.200) (8,200) Tuition and books Laptop and printer Cash used in investing activities Financing Activities Student loan 7,500 1,500 1,000 10,000 (1,900) 4,000 $2,100 Loan from parents Purchases on credit card Cash provided from financing activities Decrease in cash Cash, September 1, 2016 Cash, August 31, 2017