Questions: Week 4 : Homework 4 Problem 1-3B (Also) Prepare financial statements (LO:13) Shell Investments provides financial services related to investment selections, retirement planning, and general insurance needs. At the end of the year on December 31, 2024, the company reports the following amounts: Service revenue 331,900 Selling expense 134,800 Interest expense 8,400 Rent expense 22,000 Equipment 4,800 Accounts payable 120,000 In addition, the company had common stock of 100,000 at the beginning of the year and issued an additional 11,000 during the year. The company also had retained earnings of 141,300 at the beginning of the year and paid dividends of 3,600. Required: 1. Prepare the income statement for Shell Investments. 2. Prepare the statement of stockholders' equity for Shell Investments. 3. Prepare the balance sheet for Shell Investments.

Sure, let's start by preparing the financial statements for Shell Investments based on the provided information.

SHELL INVESTMENTS Income Statement For the Year Ended December 31, 2024

| Revenue | | |------------------------|---------------------| | Service revenue | $331,900 | | Total Revenue | $331,900 | | | | | Expenses | | | Selling expense | $134,800 | | Interest expense | $8,400 | | Rent expense | $22,000 | | Total Expenses | $165,200 | | | | | Net Income | $166,700 |

SHELL INVESTMENTS Statement of Stockholders' Equity For the Year Ended December 31, 2024

| Common Stock | | |------------------------|---------------------| | Beginning balance | $100,000 | | Issued during the year | $11,000 | | Ending balance | $111,000 | | | | | Retained Earnings | | | Beginning balance | $141,300 | | Add: Net income | $166,700 | | Less: Dividends | ($3,600) | | Ending balance | $304,400 | | | | | Total Stockholders' Equity | $415,400 |

SHELL INVESTMENTS Balance Sheet As of December 31, 2024

| Assets | | |------------------------|---------------------| | Equipment | $4,800 | | Total Assets | $4,800 | | | | | Liabilities and Stockholders' Equity | | | Liabilities | | | Accounts payable | $120,000 | | Total Liabilities | $120,000 | | | | | Stockholders' Equity | | | Common stock | $111,000 | | Retained earnings | $304,400 | | Total Stockholders' Equity | $415,400 | | | | | Total Liabilities and Stockholders' Equity | $535,400 |

Note: The balance sheet does not balance because the total assets are significantly lower than the total liabilities and stockholders' equity. This discrepancy suggests that there might be additional assets or information not provided in the problem statement. Typically, a balance sheet should balance, meaning total assets should equal the sum of total liabilities and stockholders' equity.