Question

Assignment Chapter 4: Problem 4-9 Statement of Cash Flows The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears 43 Chapter 4 Excel Assignment Service revenue $900,000 Operating expenses 700.000 Income before income taxes 200,000 Income taxes expense 50,000 Net income 150.000 The following balance sheet information is also available: 12/31/2021 12/31/2020 Cash $305,000 $70,000 120,000 100,000 Accounts Receivable Accrued liabilities (operating) 70,000 60,000 Income taxes payable 10,000 15,000 In addition, the following transactions took place during the year: 1. Common stock was issued for $100,000 in cash

Answer 1

1 2 solution 3 4 5 6 900,000-20,000 700,000-30,000-10,000 50000+5000 8,80,000 -6,60,000 -55,000 1,65,000 7 9 10 11 Diversified Portfolio corporation CASH FLOW STATEMENT (DIRECT METHOD ) FOR YEAR ENDED DEC 31, 2021 COLLECTION FROM CUSTOMERS (Service revenue -INCREASE IN ACCOUNT RECEIVABLE) PAYMENT FOR OPERATING EXPENSES(OPERATING EXPENSESEXCLUDING DEP. -INCREASE IN ACCRUED LIABILITY PAYMENT OF INCOME TAX(INCOME TAX EXPENSES + DECREASE IN INCOME TAX PAYBLES) CASH PROVIDED BY OPERATING ACTIVITIES INVESTING ACTIVITIES PROCEEDS FROM LONG TERM INVESTMENTS CASH PROVIDED IN INVESTING ACTIVITIES FINANCING ACTIVITIES PROCEEDS FROM CAPITAL PAYMENT OF DIVIDENDS CASH PROVIDED BY FINANCING ACTIVITIES NET DECREASE IN CASH (165000+50000+20000) BEGINNING CASH ENDING CASH 50,000 50,000 12 13 14 15 1,00,000 -80,000 20,000 16 17 18 19 2,35,000 70,000 3,05,000 20 21

4 5 6 7 8 150000 9 10 30000 11 50000 -20000 12 13 10000 14 -55000 165000 15 Statement of cash flow (indirect method) For year ended December 31,2021 Cash from operating activities Net income Adjustments Depreciation Provision for tax Inrease in account receivable increase in account payble Income tax paid Net cash provided by operating activities Cash flow from investing activities Sale of land net cash by investing activities Cash flow from financing activities issuance of common stock cash paid for dividends Net cash by financing activities Net increase in cash and cash equivalents during the year 2021 Cash and cash equivalents, jan 1,2020 Cash and cash equivalents, Dec 31,2021 NOTE - PLEASE UPVOTE IT SHALL BE A GREAT FAVOR THANKS 16 17 50000 50000 18 19 20 21 22 100000 -80000 20000 235000 70000 305000 23 24 25 26 דר