ICE Drilling Inc.?s balance sheet information and income statement are as follows: Additional information regarding ICE Drilling?s

Question:

ICE Drilling Inc.?s balance sheet information and income statement are as follows:

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Additional information regarding ICE Drilling?s activities during 2020:

1. Loss on sale of equipment is $11,480.

2. Paid $70,280 to reduce a long-term note payable.

3. Equipment costing $105,000, with accumulated depreciation of $63,000, is sold for cash.

4. Equipment costing $215,880 is purchased by paying cash of $56,000 and signing a long-term note payable for the balance.

5. Borrowed $8,400 by signing a short-term note payable.

6. Issued 5,600 common shares for cash at $18 per share.

7. Declared and paid cash dividends of $139,160.

Required

Prepare a statement of cash flows for 2020 that reports the cash inflows and outflows from operating activities according to the indirect method. Show your supporting calculations. Also prepare a note describing non-cash investing and financing activities.

Analysis Component: Merchandise Inventory, Prepaid Expenses, Notes Payable, and Common Shares are some of the accounts that changed during 2020. Explain what transactions likely caused each of these accounts to increase and/or decrease.

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Related Book For  book-img-for-question

Fundamental Accounting Principles Volume II

ISBN: 978-1260305838

16th Canadian edition

Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann

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