The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below:

Service revenue .......................................$ 900,000Operating expenses ..................................700,000Income before income taxes ...................200,000Income tax expense ....................................50,000Net income ..............................................$ 150,000

The following balance sheet information also is available:

In addition, the following transactions took place during the year:1. Common stock was issued for $100,000 in cash.2. Long-term investments were sold for $50,000 in cash. The original cost of the investments also was $50,000.3. $80,000 in cash dividends was paid to shareholders.4. The company has no outstanding debt, other than those payables listed above.5. Operating expenses include $30,000 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. Use a format similar to the one in the Concept Review Exercise at the end of Part B of this chapter.2. Prepare the cash flows from operating activities section of Diversified?s 2021 statement of cash flows using the indirect method. Use a format similar to the one in the Concept Review Exercise at the end of Part B of this chapter.

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12/31/2021 12/31/2020 $ 70,000 Cash $305,000 Accounts receivable 120,000 100,000 Accrued liabilities ( for operating expenses) 70,000 60,000 Income taxes payable 10,000 15,000