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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.

1. Explain the following:The elements of the balance sheet, their purposes, and how to measure themThe 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 sheetIncome statementStatement of retained earningsStatement 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 ShoppeAdjusted Trial BalanceDecember 31, 2008 DebitCreditCash$22,750 Accounts Receivable3,200 Inventory8,000 Land27,000 Building56,000 Accumulated Depreciation 16,800Accounts Payable 4,600Accrued Expenses 2,500Common Stock 20,000Additional Paid-in Capital 10,000Dividends1,200 Retained Earnings 53,405Sales 112,020Returns1,300 Purchases47,000 Salaries38,000 Supplies870 Utilities5,225 Telephone2,850 Bank Charges330 Depreciation Expense5,600  $219,325$219,325