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The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below: Service revenue Operating
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below: Service revenue Operating expenses Income before income taxes Income tax expense Net income $1,120,000 810,000 310,000 77.500 232,500 The following balance sheet information also is available: 12/31/2021 12/31/2020 Cash $ 420,500 $ 81,000 accounts receivable 142.000 111.000 Accrued liabilities for operating 92.000 expenses) 71.000 Income taxes payable 21,000 37,000 In addition, the following transactions took place during the year: 1. Common stock was issued for $122,000 in cash 2. Long-term investments were sold for $61.000 in cash. The original cost of the investments also was $61,000, 3. $91,000 in cash dividends was paid to shareholders. 4. The company has no outstanding debt, other than those payables listed above. 5. Operating expenses include $41,000 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 2. Prepare the cash flows from operating activities section of Diversified's 2021 statement of cash flows using the indirect method
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