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Problem 4-9 (Algo) Statement of cash flows (L04-8] The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below: Service revenue Operating expenses Income before income taxes Income tax expense Net income $1,160,000 830,000 330,000 82,500 $ 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. Required 1 Required 2 Prepare a statement of cash flows for 2021 for the Diversified Portfolio Corporation. Use the direct method for reporting ope deducted should be indicated with a minus sign.) DIVERSIFIED PORTFOLIO CORPORATION Statement of Cash Flows For the Year Ended December 31, 2021 Cash flows from operating activities: Cash received from customers Cash paid for operating expenses Cash paid for income taxes Net cash flows from operating activities Cash flows from investing activities: Sale of investments Net cash flows from investing activities Cash flows from financing activities: Issuance of common stock Dividends paid to shareholders Net cash flows from financing activities Increase in cash Cash and cash equivalents, January 1 Cash and cash equivalents, December 31 Required 1 Required 2 Prepare the cash flows from operating activities section of Diversified's 2021 statement of cash flows using the indirect method. (Amou should be indicated with a minus sign.) DIVERSIFIED PORTFOLIO CORPORATION Statement of Cash Flows (Partial) For the Year Ended December 31, 2021 Cash flows from operating activities: Net income Adjustments for noncash effects: Depreciation expense Changes in operating assets and liabilities: Increase in accounts receivable Increase in accrued liabilities Decrease in income taxes payable Net cash flows from operating activities

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