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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:

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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