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Ohare Company's only asset as of January 1, 2007, was limousine. During 2007, only three transactions occurred:
Provided services of $100,000 on account
Collected all accounts receivable
Depreciation on the limousine was $15,000
Required
1. Develop an income statement for Ohare for 2007.
2. Determine the amount of the net cash inflow for Ohare for 2007.
3. Explain in one or more sentences why the amount of the net income on Ohare's income statement does not equal the amount the net cash inflow.
4. If Ohare developed a cash flow statement for 2007 using the indirect method, what amount would appear in the category titled Cash Flow from Operating Activities?
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