4 Financial Statements

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.

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
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.
an 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

Please submit your assignment.

The following grading criteria will apply to this assignment:

Grading Criteria

Explain the elements of the balance sheet, their purposes, and how to measure them.

20%

Explain the elements and purpose of the statement of changes in stockholder's equity.

25%

Prepare the balance sheet.

15%

Prepare the income statement.

15%

Prepare the statement of retained earnings.

15%

Prepare the statement of cash flows.

10%

Good format, grammar and APA.

10%

TOTAL

100%

For assistance with your assignment, please use your text, Web resources, and all course materials.

Unit Materials

Unit 3