The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2024, appears below

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 2024 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 2024 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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Service revenue Operating expenses Income before income taxes Income tax expense Net income $900,000 700,000 200,000 50,000 $150,000