The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year...

  
 
 

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The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2018, appears below: Service revenue Operating expenses. Income before income taxes Income tax expense Net income $1,000,000 750,000 250,000 75,000 175,000 $ The following balance sheet information also is available: Cash Accounts receivable Accounts payable (operating expenses) Income taxes payable 12/31/18 $345,000 130,000 80,000 15,000 12/31/17 $ 75,000 105,000 65,000 25,000 In addition, the following transactions took place during the year: 1. Common stock was issued for $110,000 in cash. 2. Long-term investments were sold for $55,000 in cash. The original cost of the investments also was $55,000. 3. $85,000 in cash dividends was paid to shareholders. 4. The company has no outstanding debt, other than those payables listed above. 5. Operating expenses include $35,000 in depreciation expense. Required: 1. Prepare a statement of cash flows for 2018 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 2018 statement of cash flows using the indirect method. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the cash flows from operating activities section of Diversified's 2018 statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) DIVERSIFIED PORTFOLIO CORPORATION Statement of Cash Flows For the Year Ended December 31, 2018 Cash flows from operating activities Collections from customers Net cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net cash flows from financing activities < Required 1 $ $ 0 0 0 0 Required 2 > DIVERSIFIED PORTFOLIO CORPORATION Statement of Cash Flows (Partial) For the Year Ended December 31, 2018 Cash flows from operating activities Net income < Required 1 $ Required 2 > The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2018, appears below: Service revenue Operating expenses. Income before income taxes Income tax expense Net income $1,000,000 750,000 250,000 75,000 175,000 $ The following balance sheet information also is available: Cash Accounts receivable Accounts payable (operating expenses) Income taxes payable 12/31/18 $345,000 130,000 80,000 15,000 12/31/17 $ 75,000 105,000 65,000 25,000 In addition, the following transactions took place during the year: 1. Common stock was issued for $110,000 in cash. 2. Long-term investments were sold for $55,000 in cash. The original cost of the investments also was $55,000. 3. $85,000 in cash dividends was paid to shareholders. 4. The company has no outstanding debt, other than those payables listed above. 5. Operating expenses include $35,000 in depreciation expense. Required: 1. Prepare a statement of cash flows for 2018 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 2018 statement of cash flows using the indirect method. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the cash flows from operating activities section of Diversified's 2018 statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) DIVERSIFIED PORTFOLIO CORPORATION Statement of Cash Flows For the Year Ended December 31, 2018 Cash flows from operating activities Collections from customers Net cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net cash flows from financing activities < Required 1 $ $ 0 0 0 0 Required 2 > DIVERSIFIED PORTFOLIO CORPORATION Statement of Cash Flows (Partial) For the Year Ended December 31, 2018 Cash flows from operating activities Net income < Required 1 $ Required 2 >

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