The Diversified Portfolio Corporation provides investment advice to clients. The summarized income statement for the year ended December 31, 2018 is shown below:

Service revenues	ps	1,220,000
operating expenses		860.000
Profit before income taxes		360.000
Income from tax expenses		72,000
Net Income	ps	288,000

The following balance sheet information is also available:

	31/12/18			31/12/17
Money	ps	491,000		ps	86,000
accounts receivable		152,000			116,000
Accounts payable (operating expenses)		102,000			76,000
Income taxes payable		26,000			47,000

In addition, during the year the following transactions were carried out:

Common shares were issued for $132,000 in cash.

Long-term investments sold for $66,000 cash. The original cost of the investments was also $66,000.

$96,000 in cash dividends were paid to shareholders.

The company does not have any outstanding debt, other than the accounts payable listed above.

Operating expenses include $46,000 in depreciation expense.

Required:
1. Prepare a statement of cash flows for 2018 for the Diversified Portfolio Corporation. Use the direct method to report operating activities.
2. Prepare the cash flows from operating activities section of Diversified's 2018 statement of cash flows using the indirect method.

Answer rating: 100% (QA)

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