The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below: Service revenue $ 1,180,000 Operating expenses 840,000 Income before income taxes 340,000 Income tax expense 85,000 Net income $ 255,000 The following balance sheet information also is available: 12/31/2021 12/31/2020 Cash $ 452,000 $ 84,000 Accounts receivable 148,000 114,000 Accrued liabilities (for operating expenses) 98,000 74,000 Income taxes payable 24,000 43,000 In addition, the following transactions took place during the year: 1.Common stock was issued for $128,000 in cash. 2.Long-term investments were sold for $64,000 in cash/ The original cost of the investments also was $64,000. 3.$94,000 in cash dividends was paid to shareholders. 4.The company has no outstanding debt, other than those payables listed above. 5.Operating expenses include $44,000 in depreciation expense. Required: Prepare the ash flows from operating activities section of Diversifier’s 2021 statement of cash flows using the indirect method.
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below:
Service revenue $ 1,180,000
Operating expenses 840,000
Income before income taxes 340,000
Income tax expense 85,000
Net income $ 255,000
The following
12/31/2021 12/31/2020
Cash $ 452,000 $ 84,000
Accrued liabilities (for operating expenses) 98,000 74,000
Income taxes payable 24,000 43,000
In addition, the following transactions took place during the year:
1.Common stock was issued for $128,000 in cash.
2.Long-term investments were sold for $64,000 in cash/ The original cost of the investments also was $64,000.
3.$94,000 in cash dividends was paid to shareholders.
4.The company has no outstanding debt, other than those payables listed above.
5.Operating expenses include $44,000 in
Required:
Prepare the ash flows from operating activities section of Diversifier’s 2021 statement of
Diversified Portfolio Corporation
Statement of Cash Flows (Partial)
For the Year Ended December 31, 2021
Cash flows from operating activities:
_____________________________________ ______________________
Adjustments for noncash effects:
_____________________________________ _______________________
Changes in operating assets and liabilities:
_____________________________________ _______________________
_____________________________________ _______________________
_____________________________________ _______________________
_____________________________________ _______________________
_____________________________________ _______________________
Net cash flows from operating activities $ 0
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
