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 $ $1,112,400$

Cost of goods sold $564,000$

Gross profit $ $548,400$

Operating expenses:

Depreciation expense $ $46,000$

Other expenses $306,560$

Total operating expenses $352,560$

Profit from operations $ $195,840$

Loss on sale of equipment $12,280$

Profit before taxes $ $183,560$

Income taxes $27,960$

Profit $ $155,600$

ICE Drilling Inc.

Comparative Balance Sheet Information

December $31$

$20232022$

Cash $ $124,680$ $ $175,640$

Accounts receivable $149,600115,160$

Merchandise inventory $617,200569,600$

Prepaid expenses $12,08018,000$

Equipment $358,080250,400$

Accumulated depreciation $81,560102,560$

Accounts payable $194,240254,040$

Current notes payable $26,40018,000$

Notes payable $210,000121,200$

Common shares $454,800354,000$

Retained earnings $294,640279,000$

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

Loss on sale of equipment is $$12,280.$

Paid $$71,080$ to reduce a long$-$term note payable.

Equipment costing $$109,000,$ with accumulated depreciation of $$67,000,$ is sold for cash.

Equipment costing $$216,680$ is purchased by paying cash of $$56,800$ 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 $$139,960.$

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 merchandise unanswered

decreases caused by the purchase of merchandise unanswered

decreases caused by the sale of merchandise unanswered

increases caused by the sale of merchandise unanswered

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 advance unanswered

decreases caused by the use of prepaid expenses unanswered

decreases caused by the purchase of prepaid items, that is$,$ such as the payment of rent or insurance in advance unanswered

increases caused by the use of prepaid expenses unanswered

Notes payable:

check all that apply $3$

increases caused by the issuance of debt $($borrowing$)$ unanswered

decreases caused by principal payments unanswered

decreases caused by the issuance of debt $($borrowing$)$ unanswered

increases caused by principal payments unanswered

Common shares:

check all that apply $4$

increases caused by the issuance of shares and$/$or share dividends unanswered

decreases caused by the repurchase and$/$or cancellation of shares unanswered

decreases caused by the issuance of shares and$/$or share dividends unanswered

increases caused by the repurchase and$/$or cancellation of shares unanswered