business finance

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Assignment Details
You are an accountant for The Flower Shoppe. Your supervisor has asked you to help her prepare the year-end financial statements. Before you do, she wants to ensure that you understand some main points.

  1. Explain the following:
    • The elements of the balance sheet, their purposes, and how to measure them
    • The elements and purpose of the statement of changes in stockholder’s equity
  2. Based on the adjusted trial balance and additional information, prepare the following in an Excel file to give to the controller for review:
    • Balance sheet
    • Income statement
    • Statement of retained earnings
    • Statement of cash flows

The following is additional information about the Flower Shoppe that is needed for financial-statement preparation:

  • Net income for the year ended December 31, 2008 was $10,845.
  • Changes from the prior year’s balances included the following:
    • a decrease in accounts receivable of $300.
    • a decrease in inventory of $450.
    • an increase in accounts payable of $250.
    • a decrease in accrued expenses of $100.
  • Land was purchased in April for $3,500.
  • Cash as of January 1, 2008 was $10,105.

The Flower Shoppe
Adjusted Trial Balance
December 31, 2008
Debit
Credit
Cash
$22,750
Accounts Receivable
3,200
Inventory
8,000
Land
27,000
Building
56,000
Accumulated Depreciation
16,800
Accounts Payable
4,600
Accrued Expenses
2,500
Common Stock
20,000
Additional Paid-in Capital
10,000
Dividends
1,200
Retained Earnings
53,405
Sales
112,020
Returns
1,300
Purchases
47,000
Salaries
38,000
Supplies
870
Utilities
5,225
Telephone
2,850
Bank Charges
330
Depreciation Expense
5,600
$219,325
$219,325