The Statement of Cash Flows for The Home Depot is shown on the next page. Use the information for the fiscal year 2022 to answer the following five questions worth 3 points each.

1. Does Home Depot use the direct or indirect method? How can you tell?

2. Why is Stock-based compensation expense added to net earnings to determine cash provided by operating activities?

3. Looking at the adjustment for merchandise inventories in the operating activities section, is Home Depot depleting its inventory or building up inventory from 2021 to 2022? How can you tell?

4. Under financing activities, explain what repurchases of common stock is about and why it added to come up with net cash used by financing activites.

5. Home Depot shows $351 million in non-cash capital expenditures. Give an example of a non-cash capital expenditure and indicate the account that would be debited and the account that would be credited for this transaction.

THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS