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

ICE Drilling Inc.

Income Statement

For Year Ended December $31,2023$

Sales $ $1,110,200$

Cost of goods sold $553,000$

Gross profit $ $557,200$

Operating expenses:

Depreciation expense $ $35,000$

Other expenses $304,360$

Total operating expenses $339,360$

Profit from operations $ $217,840$

Loss on sale of equipment $10,080$

Profit before taxes $ $207,760$

Income taxes $25,760$

Profit $ $182,000$

ICE Drilling Inc.

Comparative Balance Sheet Information

December $31$

$20232022$

Cash $ $104,680$ $ $164,640$

Accounts receivable $138,600104,160$

Merchandise inventory $606,200558,600$

Prepaid expenses $11,97013,000$

Equipment $355,880239,400$

Accumulated depreciation $70,56091,560$

Accounts payable $193,930279,840$

Current notes payable $15,4007,000$

Notes payable $210,000119,000$

Common shares $443,800343,000$

Retained earnings $283,640239,400$

Additional information regarding ICE Drilling$$s activities during $2023$:

Loss on sale of equipment is $$10,080.$

Paid $$68,880$ to reduce a long$-$term note payable.

Equipment costing $$98,000,$ with accumulated depreciation of $$56,000,$ is sold for cash.

Equipment costing $$214,480$ is purchased by paying cash of $$54,600$ 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 $$137,760.$

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 sharesunanswered