Flip tshirt inside out and cut along green line.

Fold edge about half an inch and pin on red line.

Sew along dotted line to make caseing. Insert ribbon using yarn needle or safety pin. Tie in bow on top of shoulder.

At this point the remaining sleeve looked weird to me so cut a line from the bottom of the armpit to the top of the sleeve. It kind of flounces then. Voila!