The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below:
Service revenue $ 1,220,000
Operating expenses 900,000
Income before income taxes 320,000
Income tax expense 80,000
Net income $ 240,000
The following balance sheet information also is available:
12/31/2021 12/31/2020
Cash $ 455,000 $ 90,000
Accounts receivable 160,000 120,000
Accrued liabilities (for operating expenses) 110,000 80,000
Income taxes payable 30,000 55,000
In addition, the following transactions took place during the year:
a. Common stock was issued for $140,000 in cash.
b. Long-term investments were sold for $70,000 in cash.
c. The original cost of the investments also was $70,000. $100,000 in cash dividends was paid to shareholders.
d. The company has no outstanding debt, other than those payables listed above.
e. Operating expenses include $50,000 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. (Amounts to be deducted should be indicated with a minus sign.)

How does knowing about supply and demand

Recently, verizon wireless ran a pricing trial in order to estimate the elasticity of demand for its services. the manager selected three states that were representative of its entire service area and increased prices by 5 percent to customers in those areas. one week later, the number of customers enrolled in verizon's cellular plans declined 4 percent in those states, while enrollments in states where prices were not increased remained flat. the manager used this information to estimate the own-price elasticity of demand and, based on her findings, immediately increased prices in all market areas by 5 percent in an attempt to boost the company's 2016 annual revenues. one year later, the manager was perplexed because verizon's 2016 annual revenues were 10 percent lower than those in 2015"the price increase apparently led to a reduction in the company's revenues. did the manager make an error? yes - the one-week measures show demand is inelastic, so a price increase will decrease revenues. yes - the one-week measures show demand is elastic, so a price increase will reduce revenues. yes - cell phone elasticity is likely much larger in the long-run than the short-run. no - the cell phone market must have changed between 2011 and 2012 for this price increase to lower revenues.

Bridgeport company began operations at the beginning of 2018. the following information pertains to this company. 1. pretax financial income for 2018 is $115,000. 2. the tax rate enacted for 2018 and future years is 40%. 3. differences between the 2018 income statement and tax return are listed below: (a) warranty expense accrued for financial reporting purposes amounts to $7,500. warranty deductions per the tax return amount to $2,200. (b) gross profit on construction contracts using the percentage-of-completion method per books amounts to $94,700. gross profit on construction contracts for tax purposes amounts to $67,100. (c) depreciation of property, plant, and equipment for financial reporting purposes amounts to $61,800. depreciation of these assets amounts to $75,700 for the tax return. (d) a $3,600 fine paid for violation of pollution laws was deducted in computing pretax financial income. (e) interest revenue recognized on an investment in tax-exempt municipal bonds amounts to $1,500. 4. taxable income is expected for the next few years. (assume (a) is short-term in nature; assume (b) and (c) are long-term in nature.) (a) prepare the reconciliation schedule for 2017 and future years. (b) prepare the journal entry to record income tax expense for 2017. (c) prepare the income tax expense section of the income statement beginning with “income before income taxes.” (d) determine how the deferred taxes will appear on the balance sheet at the end of 2017.