The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2011, 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 2011 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 2011 statement of cash flows using the indirectmethod.

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Service revenue Operating expenses Income before income taxes 2,00,000 Income tax expense80,000 Net income $900,000 7,00,000 120,000 12/31/1112/31/10 $275,000 $70,000 1.20,0001,00,000 Accounts payable (operating expenses 70,000 60,000 10,000 15,000 Cash Accounts receivable Income taxes payable