ICE Drilling Inc.'s balance sheet Information and Income statement are as follows: ICE Drilling Inc. Income Statement For Year Ended December 31, 2020 Sales Cost of goods sold Gross profit Operating expenses: Depreciation expense Other expenses Total operating expenses Profit from operations Loss on sale of equipment Profit before taxes Income taxes Profit ICE Drilling Inc. $1,113,200 568,000 $ 545,200 $ 50,000 307,360 Comparative Balance Sheet Information 357,360 $ 187,840 13,080 $ 174,760 28,760 $ 146,000 December 31 2020 2019 Cash $ 128,680 $ 179,640 Accounts receivable 153,600 119,160 Merchandise inventory 621,200 573,600 Prepaid expenses 12,120 22,000 Equipment 358,880 254,400 Accumulated depreciation 85,560 106,560 Accounts payable 191,080 246,840 Current notes payable 30,400 22,000 Notes payable 210,000 122,000 Common shares 458,800 358,000 Retained earnings 298,640 293,400 Additional Information regarding ICE Drilling's activities during 2020: 1. Loss on sale of equipment is $13,080. 2. Paid $71,880 to reduce a long-term note payable. 3. Equipment costing $113,000, with accumulated depreciation of $71,000, is sold for cash. 4. Equipment costing $217,480 Is purchased by paying cash of $57,600 and signing a long-term note payable for the balance. 5. Borrowed $8,400 by signing a short-term note payable. 6. Issued 10,080 common shares for cash at $10 per share. 7. Declared and paid cash dividends of $140,760. Required: Prepare a statement of cash flows for 2020 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.) Cash flows from operating activities: ICE DRILLING INC. Statement of Cash Flows For Year Ended December 31, 2020 Adjustments to reconcile profit to net cash inflows from operating activities: Cash flows from investing activities: Cash flows from financing activities: Merchandise Inventory, Prepaid Expenses, Notes Payable, and Common Shares are some of the accounts that changed during 2020. 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: Increases caused by the purchase of merchandise decreases caused by the purchase of merchandise decreases caused by the sale of merchandise Increases caused by the sale of merchandise Prepaid expenses: ? Increases caused by the purchase of prepaid items, I.e., such as the payment of rent or Insurance in advance ? decreases caused by the use of prepaid expenses ? decreases caused by the purchase of prepaid items, I.e., such as the payment of rent or Insurance in advance ? Increases caused by the use of prepaid expenses Notes payable: ? Increases caused by the issuance of debt (borrowing) ? decreases caused by principal payments decreases caused by the Issuance of debt (borrowing) Increases caused by principal payments Common shares: Increases caused by the issuance of shares and/or share dividends decreases caused by the repurchase and/or cancellation of shares decreases caused by the issuance of shares and/or share dividends