The Diversified Portfolio Corporation provides investment advice to customers. A

Question

The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2016, appears below:

Long-term investments were sold for $51,000 in cash. The original cost of the investments also was $51,000.

Prepare a statement of cash flows for 2016 for the Diversified Portfolio Corporation. Use the direct method for reporting operating activities. (Amounts to be deducted should be indicated with a minus sign.)

The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2016, appears below:

Explanation / Answer

Statement of cash flows

Particulars Amount Operating actiities Net Income 126000 Add: Depreciatio 31000 Less: Increase in accounts recievable 11000 Add: Increase in account payable 11000 Less: decrease in income tax payable 6000 Cash flow from operain activities ...A 151000 Investing activities Proceeds form sale of investment 51000 Net cash flow from investing activities 51000 Financing activitiea Common stock 102000 Dividend (81000) Net cash flow from financing activities 21000 Cash floww from all activities 223000 Add: Opening cash and cash equivalent 71000 Closing cash and cash equivalent 284000

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