P 4-9 Statement of cash flows LO4-8 The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2018, appears below $900,000 Service revenue Operating expenses 700,000 Income before income taxes 200,000 Income tax expense 80,000 $120,000 Net income Page 218 The following balance sheet information also is available: 12/31/2018 12/31/2017 $ 70,000 $275,000 Cash 120,000 100,000 Accounts receivable 70,000 Accounts payable (operating expenses) 60,000 10,000 15,000 Income taxes payable In addition, the following transactions took place during the year: 1. Common stock was issued for S100,000 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 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