Depreciation and Cash Flow O’hare Company’s only asset as of January 1, 2010, was a limousine. During 2010, 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 2010.

2. Determine the amount of the net cash infl ow for O’hare for 2010.

3. Explain why O’hare’s net income does not equal net cash infl ow.

4. If O’hare developed a cash fl ow statement for 2010 using the indirect method, what amount would appear in the category titled Cash Flow from Operating Activities?

AppendixLO1