Chapter 21, Problem 21.12Q

To determine

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash and result of these transactions is reported as ending balance of cash at the end of reported period.

Spreadsheet: The spreadsheet is a supplementary device which helps to prepare the adjusting entries and the statement of cash flows easier.  The spreadsheet is a working tool of the accountant but it is not a permanent accounting record.

 To Explain: The purpose of the “changes” columns of a spreadsheet to prepare a statement of cash flows.