The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2024, appears below: Service revenue Operating expenses Income before income taxes Income tax expense Net income $ 1,140,000 820,000 320,000 80,000 $ 240,000 The following balance sheet information also is available: 12/31/2024 $ 431,000 144,000 94,000 22,000 12/31/2023 $ 82,000 112,000 72,000 39,000 Cash Accounts receivable Accrued liabilities (for operating expenses) Income taxes payable In addition, the following transactions took place during the year: 1. Common stock was issued for $124,000 in cash. 2. Long-term investments were sold for $62,000 in cash. The original cost of the investments also was $62,000. 3. $92,000 in cash dividends was paid to shareholders. 4. The company has no outstanding debt, other than those payables listed above. 5. Operating expenses include $42,000 in depreciation expense. Required: 1. Prepare a statement of cash flows for 2024 for the Diversified Portfolio Corporation. Use the direct method for reporting operating activities. 2. Prepare the cash flows from operating activities section of Diversified's 2024 statement of cash flows using the indirect met
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2024, appears below: Service revenue Operating expenses Income before income taxes Income tax expense Net income $ 1,140,000 820,000 320,000 80,000 $ 240,000 The following balance sheet information also is available: 12/31/2024 $ 431,000 144,000 94,000 22,000 12/31/2023 $ 82,000 112,000 72,000 39,000 Cash Accounts receivable Accrued liabilities (for operating expenses) Income taxes payable In addition, the following transactions took place during the year: 1. Common stock was issued for $124,000 in cash. 2. Long-term investments were sold for $62,000 in cash. The original cost of the investments also was $62,000. 3. $92,000 in cash dividends was paid to shareholders. 4. The company has no outstanding debt, other than those payables listed above. 5. Operating expenses include $42,000 in depreciation expense. Required: 1. Prepare a statement of cash flows for 2024 for the Diversified Portfolio Corporation. Use the direct method for reporting operating activities. 2. Prepare the cash flows from operating activities section of Diversified's 2024 statement of cash flows using the indirect met
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vikram
Transcribed Image Text:The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended
December 31, 2024, appears below:
Service revenue
Operating expenses
Income before income taxes
Income tax expense
Net income
$ 1,140,000
820,000
320,000
80,000
$ 240,000
The following balance sheet information also is available:
12/31/2024
$ 431,000
144,000
94,000
22,000
12/31/2023
$ 82,000
112,000
72,000
39,000
Cash
Accounts receivable
Accrued liabilities (for operating expenses)
Income taxes payable
In addition, the following transactions took place during the year:
1. Common stock was issued for $124,000 in cash.
2. Long-term investments were sold for $62,000 in cash. The original cost of the investments also was $62,000.
3. $92,000 in cash dividends was paid to shareholders.
4. The company has no outstanding debt, other than those payables listed above.
5. Operating expenses include $42,000 in depreciation expense.
Required:
1. Prepare a statement of cash flows for 2024 for the Diversified Portfolio Corporation. Use the direct method for reporting
operating activities,
2. Prepare the cash flows from operating activities section of Diversified's 2024 statement of cash flows using the indirect meth
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