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Question - Dalmatian Inc. had $50 of Net Income this year. It capitalized $530 in software development costs and recognized Amortization Expense for those costs of $180 during the year. Dalmatian's tax rate is 40%. What would Dalmatian's Net Income have been this year if it had expensed all software development costs immediately?
a. $140
b. ($300)
c. $400
d. $278
e. ($160)
Write 350-word response regarding the differences between the direct and indirect presentation of cash flows. Why does the Financial Accounting Standards Board allow both methods? Which do you prefer? Why?
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