1 answer

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

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 activi

50,000 Sale of investments Net cash flows from investing activities 50,000 Cash flows from financing activities (80,000) Paym

Required 1 Required 2 Prepare the cash flows from operating activities section of Diversifieds 2018 statement of cash flows


Answers

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
.

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