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 $ $1,112,000$

Cost of goods sold $562,000$

Gross profit $ $550,000$

Operating expenses:

Depreciation expense $ $44,000$

Other expenses $306,160$

Total operating expenses $350,160$

Profit from operations $ $199,840$

Loss on sale of equipment $11,880$

Profit before taxes $ $187,960$

Income taxes $27,560$

Profit $ $160,400$

ICE Drilling Inc.

Comparative Balance Sheet Information

December $31$

$20232022$

Cash $ $122,680$ $ $173,640$

Accounts receivable $147,600113,160$

Merchandise inventory $615,200567,600$

Prepaid expenses $12,06016,000$

Equipment $357,680248,400$

Accumulated depreciation $79,560100,560$

Accounts payable $195,820257,640$

Current notes payable $24,40016,000$

Notes payable $210,000120,800$

Common shares $452,800352,000$

Retained earnings $292,640271,800$

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

Loss on sale of equipment is $$11,880.$

Paid $$70,680$ to reduce a long$-$term note payable.

Equipment costing $$107,000,$ with accumulated depreciation of $$65,000,$ is sold for cash.

Equipment costing $$216,280$ is purchased by paying cash of $$56,400$ 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 $$139,560.$

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 sharesunanswered