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.
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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
|