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The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year er December 31, 2021, appears below: Service revenue Operating expenses Income before income taxes Income tax expense Net income $1,060,000 780,000 280,000 70,000 $ 210,000 The following balance sheet information also is available: Cash Accounts receivable Accrued liabilities (for operating expenses) Income taxes payable 12/31/2021 $ 389,000 136,000 86,000 18,000 12/31/2020 $ 78,000 108,000 68,000 31,000 In addition, the following transactions took place during the year: 1. Common stock was issued for $116,000 in cash. 2. Long-term investments were sold for $58,000 in cash. The original cost of the investments also was $58,000. 3. $88,000 in cash dividends was paid to shareholders. 4. The company has no outstanding debt, other than those payables listed above. 5. Operating expenses include $38,000 in depreciation expense.

The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year er December 31, 2021, appears below: Service revenue Operating expenses Income before income taxes Income tax expense Net income $1,060,000 780,000 280,000 70,000 $ 210,000 The following balance sheet information also is available: Cash Accounts receivable Accrued liabilities (for operating expenses) Income taxes payable 12/31/2021 $ 389,000 136,000 86,000 18,000 12/31/2020 $ 78,000 108,000 68,000 31,000 In addition, the following transactions took place during the year: 1. Common stock was issued for $116,000 in cash. 2. Long-term investments were sold for $58,000 in cash. The original cost of the investments also was $58,000. 3. $88,000 in cash dividends was paid to shareholders. 4. The company has no outstanding debt, other than those payables listed above. 5. Operating expenses include $38,000 in depreciation expense.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below: Service revenue Operating expenses Income before income taxes. Income tax expense Net income $ 1,060,000 780,000 280,000 70,000 $ 210,000 The following balance sheet information also is available: Cash Accounts receivable Accrued liabilities (for operating expenses) Income taxes payable 12/31/2021 $ 389,000 136,000 86,000 18,000 12/31/2020 $ 78,000 108,000 68,000 31,000 In addition, the following transactions took place during the year: 1. Common stock was issued for $116,000 in cash. 2. Long-term investments were sold for $58,000 in cash. The original cost of the investments also was $58,000. 3. $88,000 in cash dividends was paid to shareholders. 4. The company has no outstanding debt, other than those payables listed above. 5. Operating expenses include $38,000 in depreciation expense. Required: 1. Prepare a statement of cash flows for 2021 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 2021 statement of cash flows using the indirect method. Complete this question by entering your answers in the tabs below. DIVERSIFIED PORTFOLIO CORPORATION Statement of Cash Flows Required 1 Required 2 Prepare a statement of cash flows for 2021 for the Diversified Portfolio Corporation. Use the direct method for reporting operating activities. (Amounts to be deducted should be indicated with a minus sign.)
Transcribed Image Text:The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below: Service revenue Operating expenses Income before income taxes. Income tax expense Net income $ 1,060,000 780,000 280,000 70,000 $ 210,000 The following balance sheet information also is available: Cash Accounts receivable Accrued liabilities (for operating expenses) Income taxes payable 12/31/2021 $ 389,000 136,000 86,000 18,000 12/31/2020 $ 78,000 108,000 68,000 31,000 In addition, the following transactions took place during the year: 1. Common stock was issued for $116,000 in cash. 2. Long-term investments were sold for $58,000 in cash. The original cost of the investments also was $58,000. 3. $88,000 in cash dividends was paid to shareholders. 4. The company has no outstanding debt, other than those payables listed above. 5. Operating expenses include $38,000 in depreciation expense. Required: 1. Prepare a statement of cash flows for 2021 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 2021 statement of cash flows using the indirect method. Complete this question by entering your answers in the tabs below. DIVERSIFIED PORTFOLIO CORPORATION Statement of Cash Flows Required 1 Required 2 Prepare a statement of cash flows for 2021 for the Diversified Portfolio Corporation. Use the direct method for reporting operating activities. (Amounts to be deducted should be indicated with a minus sign.)
Required: 1. Prepare a statement of cash flows for 2021 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 2021 statement of cash flows using the indirect method. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a statement of cash flows for 2021 for the Diversified Portfolio Corporation. Use the direct method for reporting operating activities. (Amounts to be deducted should be indicated with a minus sign.) DIVERSIFIED PORTFOLIO CORPORATION Statement of Cash Flows For the Year Ended December 31, 2021 Cash flows from operating activities: Net cash flows from operating activities Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: Net cash flows from financing activities Increase in cash Cash and cash equivalents, January 1 Cash and cash equivalents, December 31 Required 1 $ $ 0 0 0 0 Required 2 >
Transcribed Image Text:Required: 1. Prepare a statement of cash flows for 2021 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 2021 statement of cash flows using the indirect method. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a statement of cash flows for 2021 for the Diversified Portfolio Corporation. Use the direct method for reporting operating activities. (Amounts to be deducted should be indicated with a minus sign.) DIVERSIFIED PORTFOLIO CORPORATION Statement of Cash Flows For the Year Ended December 31, 2021 Cash flows from operating activities: Net cash flows from operating activities Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: Net cash flows from financing activities Increase in cash Cash and cash equivalents, January 1 Cash and cash equivalents, December 31 Required 1 $ $ 0 0 0 0 Required 2 >
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