Depreciation and Cash Flow O’hare Company’s only asset as of January 1, 2008, was a limousine. During 2008, only the following three transactions occurred:

Services of $100,000 were provided on account.

All accounts receivable were collected.

Depreciation on the limousine was $15,000.

Required 1. Develop an income statement for O’hare for 2008.

2. Determine the amount of the net cash inflow for O’hare for 2008.

3. Explain in one or more sentences why the amount of the net income on O’hare’s income statement does not equal the amount of the net cash inflow.

4. If O’hare developed a cash flow statement for 2008 using the indirect method, what amount would appear in the category titled Cash Flow from Operating Activities?