Question
THE ANSWER IS NOT COMPLETE ( I DARE YOU TO FIND THE MISSING ANSWERS) PLEASE FIND ALL The Diversified Portfolio Corporation provides investment advice to
THE ANSWER IS NOT COMPLETE ( I DARE YOU TO FIND THE MISSING ANSWERS) PLEASE FIND ALL
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2018, appears below:
Service revenue | $ | 900,000 |
Operating expenses | 700,000 | |
Income before income taxes | 200,000 | |
Income tax expense | 80,000 | |
Net income | $ | 120,000 |
The following balance sheet information also is available:
12/31/18 | 12/31/17 | ||||
Cash | $ | 275,000 | $ | 70,000 | |
Accounts receivable | 120,000 | 100,000 | |||
Accounts payable (operating expenses) | 70,000 | 60,000 | |||
Income taxes payable | 10,000 | 15,000 | |||
In addition, the following transactions took place during the year:
- Common stock was issued for $100,000 in cash.
- Long-term investments were sold for $50,000 in cash. The original cost of the investments also was $50,000.
- $80,000 in cash dividends was paid to shareholders.
- The company has no outstanding debt, other than those payables listed above.
- 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 Diversifieds 2018 statement of cash flows using the indirect method.
Answer is not complete Complete this question by entering your answers in the tabs below Required Required 2 operating activities. (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 $ 880,000 (660,000) (85,000) Payment of operating expenses Payment of income taxes Net cash flows from operating activities 135,000 Cash flows from investing activities 50009g. Sale.of investments 50,000 Sale of investments Net cash flows from investing activities 50,000 Cash flows from financing activities (80,000) Payment of dividends Proceeds from issue of common stock 100,000 Net cash flows from financing activities 20,000 Increase in cash 205,000 70,000 Cash and cash equivalents, January 1 Cash and cash equivalents, December 31 $ 275,000 Required 2>Step by Step Solution
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