Question

In: Accounting

The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year...

The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below:

Service revenue $ 1,160,000
Operating expenses 830,000
Income before income taxes 330,000
Income tax expense 82,500
Net income $ 247,500


The following balance sheet information also is available:

12/31/2021 12/31/2020
Cash $ 441,500 $ 83,000
Accounts receivable 146,000 113,000
Accrued liabilities (for operating expenses) 96,000 73,000
Income taxes payable 23,000 41,000


In addition, the following transactions took place during the year:

  1. Common stock was issued for $126,000 in cash.
  2. Long-term investments were sold for $63,000 in cash. The original cost of the investments also was $63,000.
  3. $93,000 in cash dividends was paid to shareholders.
  4. The company has no outstanding debt, other than those payables listed above.
  5. Operating expenses include $43,000 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.
  

Solutions

Expert Solution


Related Solutions

The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below: Service revenue $ 1,080,000 Operating expenses 790,000 Income before income taxes 290,000 Income tax expense 72,500 Net income $ 217,500 The following balance sheet information also is available: 12/31/2021 12/31/2020 Cash $ 399,500 $ 79,000 Accounts receivable 138,000 109,000 Accrued liabilities (for operating expenses) 88,000 69,000 Income taxes payable 19,000 33,000 In addition, the following transactions took place...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2018, appears below: Service revenue $ 1,220,000 Operating expenses 860,000 Income before income taxes 360,000 Income tax expense 72,000 Net income $ 288,000 The following balance sheet information also is available: 12/31/18 12/31/17 Cash $ 491,000 $ 86,000 Accounts receivable 152,000 116,000 Accounts payable (operating expenses) 102,000 76,000 Income taxes payable 26,000 47,000 In addition, the following transactions took place during...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below: Service Revenue $1,080,000 Operating Expenses $790,000 Income before Income Tax $290,000 Income Tax Expense $72,500 Net Income $217,500 The following balance sheet information also is available: 12/31/2021 12/31/2020 Cash $399,500 $79,000 Accounts Receivable $138,000 $109,000 Accrued Liabilities (for operating expense) $88,000 $69,000 Income Taxes Payable $19,000 $33,000 In addition, the following transactions took place during the year: Common...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below: Service revenue $ 940,000 Operating expenses 720,000 Income before income taxes 220,000 Income tax expense 55,000 Net income $ 165,000 The following balance sheet information also is available: 12/31/2021 12/31/2020 Cash $ 326,000 $ 72,000 Accounts receivable 124,000 102,000 Accrued liabilities (for operating expenses) 74,000 62,000 Income taxes payable 12,000 19,000 In addition, the following transactions took place...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2018, appears below: Service revenue $ 1,060,000 Operating expenses 780,000 Income before income taxes 280,000 Income tax expense 84,000 Net income $ 196,000 The following balance sheet information also is available: 12/31/18 12/31/17 Cash $ 375,000 $ 78,000 Accounts receivable 136,000 108,000 Accounts payable (operating expenses) 86,000 68,000 Income taxes payable 18,000 31,000 In addition, the following transactions took place during...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below: Service revenue $ 1,120,000 Operating expenses 810,000 Income before income taxes 310,000 Income tax expense 77,500 Net income $ 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 expenses) 92,000 71,000 Income taxes payable 21,000 37,000 In addition, the following transactions took place...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below: Service revenue $ 1,020,000 Operating expenses 760,000 Income before income taxes 260,000 Income tax expense 65,000 Net income $ 195,000 The following balance sheet information also is available: 12/31/2021 12/31/2020 Cash $ 368,000 $ 76,000 Accounts receivable 132,000 106,000 Accrued liabilities (for operating expenses) 82,000 66,000 Income taxes payable 16,000 27,000 In addition, the following transactions took place...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2018, appears below: Service revenue $ 1,100,000 Operating expenses 800,000 Income before income taxes 300,000 Income tax expense 60,000 Net income $ 240,000 The following balance sheet information also is available: 12/31/18 12/31/17 Cash $ 425,000 $ 80,000 Accounts receivable 140,000 110,000 Accounts payable (operating expenses) 90,000 70,000 Income taxes payable 20,000 35,000 In addition, the following transactions took place during...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2018, appears below: Service revenue $ 940,000 Operating expenses 720,000 Income before income taxes 220,000 Income tax expense 66,000 Net income $ 154,000 The following balance sheet information also is available: 12/31/18 12/31/17 Cash $ 315,000 $ 72,000 Accounts receivable 124,000 102,000 Accounts payable (operating expenses) 74,000 62,000 Income taxes payable 12,000 19,000 In addition, the following transactions took place during...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year...
The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2018, appears below: Service revenue $ 1,220,000 Operating expenses 900,000 Income before income taxes 320,000 Income tax expense 96,000 Net income $ 224,000 The following balance sheet information also is available: 12/31/18 12/31/17 Cash $ 439,000 $ 90,000 Accounts receivable 160,000 120,000 Accounts payable (operating expenses) 110,000 80,000 Income taxes payable 30,000 55,000 In addition, the following transactions took place during...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT