Reliance Corporation has provided the following information for the year ended December 31, 2019:• The equipment account balance increased $200,000.• The equipment accumulated depreciation account balance increased $35,000.• Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.• Depreciation expense recorded on the equipment during the year was $65,000.Which of the following statements is correct with respect to determining cash flow from operating activities?
A. Using the indirect method, net income is increased by the $30,000 increase in the accumulated depreciation account balance.
B. Using the indirect method, net income is increased by the $10,000 gain on the sale of the equipment.
C. Using the indirect method, net income is increased by the $65,000 depreciation expense.
D. Using the indirect method, net income is decreased by the $30,000 sales price of the equipment.
Answer: C
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