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 $1,110,400 554,000 $ 556,400 $ 36,000 304,560 ICE Drilling Inc. Comparative Balance Sheet Information 340,560 $ 215,840 10,280 $ 205,560 25,960 $ 179,600 December 31 2020 2019 Cash $ 105,680 $ 165,640 Accounts receivable 139,600 105,160 Merchandise inventory 607,200 559,600 Prepaid expenses 11,980 14,000 Equipment 356,080 240,400 Accumulated depreciation 71,560 92,560 Accounts payable 193,140 278,040 Current notes payable 16,400 8,000 Notes payable 210,000 119,200 Common shares 444,800 344,000 Retained earnings 284,640 243,000 Additional information regarding ICE Drilling's activities during 2020: 1. Loss on sale of equipment is $10,280. 2. Paid $69,080 to reduce a long-term note payable. 3. Equipment costing $99,000, with accumulated depreciation of $57,000, is sold for cash. 4. Equipment costing $214,680 is purchased by paying cash of $54,800 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 $137,960. Other information: a. All sales are credit sales. b. All credits to accounts receivable in the period are receipts from customers. c. Purchases of merchandise are on credit. d. All debits to accounts payable in the period result from payments for merchandise. e. The only decrease in income taxes payable is for payment of taxes. f. The other expenses are paid in advance and are initially debited to Prepaid Expenses. Required: Prepare a statement of cash flows for 2020 using the direct method to report cash inflows and outflows from operating activities. (List any deduction in cash and cash outflows as negative amounts.) ICE DRILLING INC. Statement of Cash Flows For Year Ended December 31, 2020 Cash flows from operating activities: Cash received from customers Cash paid for merchandise inventory Cash paid for other expenses Cash paid for income taxes Net cash inflow from operating activities Cash flows from investing activities: Cash received from sale of equipment Cash paid for equipment $ 1,075,960 (25,960) Net cash outflow from investing activities Cash flows from financing activities: Cash received from issuing common shares Cash borrowed on current notes payable $ 100,800 Cash paid on notes payable Cash paid for dividends Net cash outflow from financing activities Net decrease in cash Cash balance at beginning of 2020 Cash balance at end of 2020 (69,080) (137,960) $ 1,050,000 0 (106,240) $ 943,760 $ 943,760