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Accounting
Question
Assuming a 30% tax rate, walk me through 3 statements with a:
$120 decrease in depreciation
Answer
Starting on the IS...
Pre-tax income up $120, NI up 84
Moving onto the SCF...
NI up 84, back out depreciation as non-cash, net change in cash is down 36
Finally, on the BS...
A: Assets up 84; Cash down 36, PP&E up 120
L: No Change
SE: Shareholder's Equity up 84; NI up by 84
...and the Balance Sheet balances