Question

THE ANSWER IS NOT COMPLETE ( I DARE YOU TO FIND THE MISSING ANSWERS) PLEASE FIND ALL

DONT MIX REQUIREMENT 1 AND 2 IN OME TABLE WORK FOR EACH ON ALONE

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:

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 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.
  

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

Answer 1

1.

Cash Flow Statement
Direct Method
For the Year December 31, 2018
Cash flow from Operating Activities
Cash Collected from Customers		$ 8,80,000.00
Cash Paid for operating expenses		$ -6,60,000.00
Cash Paid for Income Taxes		$    -85,000.00
Cash from operating activities			$ 1,35,000.00
Cash flow from Investing Activities
Sale of Long Term Investments		$      50,000.00
Cash used in investing activities			$      50,000.00
Cash flow from Financing Activities
Issued Shares		$ 1,00,000.00
Dividend Paid		$    -80,000.00
Cash Used in financing activities			$      20,000.00
Net Increase in cash			$ 2,05,000.00
Opening Cash Balance			$      70,000.00
Ending Cash Balance			$   2,75,000.00

2.

Cash Flow Statement
Indirect Method
For the Year December 31, 2018
Cash flow from Operating Activities
Net Income		$ 1,20,000.00
Adjustments
Depreciation	$   30,000.00
Change In current assets & Liabilities	$                 -
Increase in Accounts Receivable (net)	$ -20,000.00
Increase in Accounts payable	$   10,000.00
Decrease in Income Tax Payable	$   -5,000.00
Total Adjustments		$      15,000.00
Cash from operating activities			$ 1,35,000.00
Cash flow from Investing Activities
Sale of Long Term Investments		$      50,000.00
Cash used in investing activities			$      50,000.00
Cash flow from Financing Activities
Issued Shares		$ 1,00,000.00
Dividend Paid		$    -80,000.00
Cash Used in financing activities			$      20,000.00
Net Increase in cash			$ 2,05,000.00
Opening Cash Balance			$      70,000.00
Ending Cash Balance			$   2,75,000.00