Ohare Companys only asset as of January 1, 2014, was a limousine. During 2014, only the following

Question:

O’hare Company’s only asset as of January 1, 2014, was a limousine. During 2014, 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 2014.
2. Determine the amount of the net cash inflow for O’hare for 2014.
3. Explain why O’hare’s net income does not equal net cash inflow.
4. If O’hare developed a cash flow statement for 2014 using the indirect method, what amount would appear in the category titled Cash Flow from Operating Activities?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...

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