Walk me through how Depreciation going up by $10 would affect the statements

Income Statement: Operating Income would decline by $10 and assuming a 40% tax rate, Net Income would go down by $6. 

Cash Flow Statement: The Net Income at the top goes down by $6, but the $10 Depreciation is a non-cash expense that gets added back, so overall Cash Flow from Operations goes up by $4. There are no changes elsewhere, so the overall Net Change in Cash goes up by $4.

Balance Sheet: Plants, Property & Equipment goes down by $10 on the Assets side because of the Depreciation, and Cash is up by $4 from the changes on the Cash Flow Statement.

Overall, Assets are down by $6. Since Net Income fell by $6 as well, Shareholders’ Equity on the Liabilities & Shareholders’ Equity side is down by $6, and both sides of the Balance Sheet balance.

Note: With this type of question I always recommend going in the order: 

1. Income Statement 2. Cash Flow Statement 3. Balance Sheet

This is so you can check yourself at the end and make sure the Balance Sheet balances.

Remember that an Asset going up decreases your Cash Flow, whereas a Liability going up increases your Cash Flow.