Indicate whether the following independent transactions increase, decrease or does not effect the net income, the amount of working capital and the operating cash. Prior to the transaction, both the current ratio is greater than 1.

Problem 4-3

Recorded depreciation on machinery.

Working Capital: [ Select ] ["Increase", "Decrease", "Does Not Effect"]

Current Ratio: [ Select ] ["Increase", "Decrease", "Does Not Effect"]

Operating Income: [ Select ] ["Increase", "Decrease", "Does Not Effect"]