Spreadsheet Analysis Preparing a statement of cash flows using the indirect method

(Note: If you completed ATC 14-7, that spreadsheet can be modified to complete this problem.)

Refer to the information in Problem 14-18A. Solve for the statement of cash flows using the indirect method. Instead of using the T-account method, set up the following spreadsheet to work through the analysis. The Debit/Credit entries are very similar to the T-account method except that they are entered onto a spreadsheet. Instead of making entries on row 2 for Cash, Cash Flow entries are made beginning on row 18.

Required

a. Enter information in Column A.

b. Enter the beginning balance sheet amounts in Column B and ending balances in Column G. Total the debits and credits for each column.

c. To prevent erroneous entries to Cash in row 2, darken the area in Columns C through F.

d. Record the entry for Net Income. This is entry

(a) provided.

e. Record the entry for Depreciation expense. This is entry

(b) provided.

f. Record the entries for the changes in current assets and liabilities. The entry for the change in Accounts Receivable has been provided and is referenced as entry (c).
g. Record the four entries from the Other Information provided in Problem 14-18A. These are the investing and financing activities.
h. In Column H set up the IF function to determine whether the balance sheet accounts are in balance or not (“off ”). Cell H3 for Accounts Receivable is provided for you. Cell H3 can be copied to all the balance sheet debit accounts. The balance sheet credit account formulas will differ given the different debit/credit rules for those accounts. When the word “Balance” is reflected in every balance sheet cell in column H, the spreadsheet analysis is complete.
i. Total the Debit and Credit columns to ensure that the two columns are equal.
j. As a final check, beginning in cell J2, compute the change in the Cash account by subtracting the beginning balance from the ending balance. The difference will equal $28,200. Also beginning in cell J18, compute the difference in the debit and credit cash entries in rows 18 through 32. The difference should also equal $28,200.