CE Drilling Inc.s balance sheet information and income statement are as follows: ICE Drilling Inc. Income Statement For Year Ended December 31, 2023 Sales $ 1,113,000 Cost of goods sold 567,000 Gross profit $ 546,000 Operating expenses: Depreciation expense $ 49,000 Other expenses 307,160 Total operating expenses 356,160 Profit from operations $ 189,840 Loss on sale of equipment 12,880 Profit before taxes $ 176,960 Income taxes 28,560 Profit $ 148,400 ICE Drilling Inc. Comparative Balance Sheet Information December 31 2023 2022 Cash $ 127,680 $ 178,640 Accounts receivable 152,600 118,160 Merchandise inventory 620,200 572,600 Prepaid expenses 12,110 21,000 Equipment 358,680 253,400 Accumulated depreciation 84,560 105,560 Accounts payable 191,870 248,640 Current notes payable 29,400 21,000 Notes payable 210,000 121,800 Common shares 457,800 357,000 Retained earnings 297,640 289,800 Additional information regarding ICE Drillings activities during 2023: Loss on sale of equipment is $12,880. Paid $71,680 to reduce a long-term note payable. Equipment costing $112,000, with accumulated depreciation of $70,000, is sold for cash. Equipment costing $217,280 is purchased by paying cash of $57,400 and signing a long-term note payable for the balance. Borrowed $8,400 by signing a short-term note payable. Issued 10,080 common shares for cash at $10 per share. Declared and paid cash dividends of $140,560. Required: Prepare a statement of cash flows for 2023 that reports the cash inflows and outflows from operating activities according to the indirect method. (List any deduction in cash and cash outflows as negative amounts.) Analysis Component: Merchandise Inventory, Prepaid Expenses, Notes Payable, and Common Shares are some of the accounts that changed during 2023. Indicate what transactions likely caused each of these accounts to increase and/or decrease. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Merchandise inventory: check all that apply 1 increases caused by the purchase of merchandiseunanswered decreases caused by the purchase of merchandiseunanswered decreases caused by the sale of merchandiseunanswered increases caused by the sale of merchandiseunanswered Prepaid expenses: check all that apply 2 increases caused by the purchase of prepaid items, that is, such as the payment of rent or insurance in advanceunanswered decreases caused by the use of prepaid expensesunanswered decreases caused by the purchase of prepaid items, that is, such as the payment of rent or insurance in advanceunanswered increases caused by the use of prepaid expensesunanswered Notes payable: check all that apply 3 increases caused by the issuance of debt (borrowing)unanswered decreases caused by principal paymentsunanswered decreases caused by the issuance of debt (borrowing)unanswered increases caused by principal paymentsunanswered Common shares: check all that apply 4 increases caused by the issuance of shares and/or share dividendsunanswered decreases caused by the repurchase and/or cancellation of sharesunanswered decreases caused by the issuance of shares and/or share dividendsunanswered increases caused by the repurchase and/or cancellation of shares