The following information relates to Equipment and related accounts of De Soto Corporation:

-Refer to Exhibit 13-3. Assuming De Soto uses the indirect method, the depreciation expense that would be added to net income in computing cash flows from operations would be

Question

The following information relates to Equipment and related accounts of De Soto Corporation:
 
-Refer to Exhibit 13-3. Assuming De Soto uses the indirect method, the depreciation expense that would be added to net income in computing cash flows from operations would be

Quizplus · Accepted Answer

The depreciation expense for the year is $15,000 ($100,000 cost divided by 6 years of useful life). Under the indirect method, you would add back the depreciation expense to net income in order to compute cash flows from operations.

The Following Information Relates to Equipment and Related Accounts of De