O'hare Company's only asset as of January 1, 2017, was a limousine. During 2017, only the following three transactions occurred:Services of $92,000 were provided on account.All accounts receivable were collected.Depreciation on the limousine was $16,700.Required:1. Develop an income statement for O'hare for 2017.O'hare CompanyIncome StatementFor The Year Ended December 31, 2017Service revenue $Depreciation expense Net income $ 2. Determine the amount of the net cash inflow for O'hare for 2017. $3. The amount of net income does not equal the amount of the net cash inflow because of depreciation expense. This is a noncash charge which does not affect cash. This needs to be added back to net income to determine the amount of net cash inflow.4. If O'hare developed a cash flow statement for 2017 using the indirect method, what amount would appear in the category titled Cash Flow from Operating Activities?$

Net income & Net cash flow: Net income is the revenues recognized in a reporting period less the…

Answered: O'hare Company's only asset as of…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles

Section: Chapter Questions

Problem 8.4P

See similar textbooks

Related questions

Question

100%

O'hare Company's only asset as of January 1, 2017, was a limousine. During 2017, only the following three transactions occurred:

Services of $92,000 were provided on account.
All accounts receivable were collected.
Depreciation on the limousine was $16,700.

Required:

1. Develop an income statement for O'hare for 2017.

O'hare Company
Income Statement
For The Year Ended December 31, 2017
Service revenue	$
Depreciation expense
Net income	$

2. Determine the amount of the net cash inflow for O'hare for 2017.
$

3. The amount of net income does not equal the amount of the net cash inflow because of depreciation expense. This is a noncash charge which does not affect cash. This needs to be added back to net income to determine the amount of net cash inflow.

4. If O'hare developed a cash flow statement for 2017 using the indirect method, what amount would appear in the category titled Cash Flow from Operating Activities?
$

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions