O'hare Company - 24 Jan, 2012

Problem 8-4

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 inflow for O'hare for 2010.

3.- Explain why O'hare's net income does not equal net cash inflow.

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