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 $1,112,800 566,000 $ 546,800 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. $ 48,000 306,960 Comparative Balance Sheet Information 354,960 $ 191,840 12,680 $ 179,160 28,360 $ 150,800 December 31 2020 2019 Cash $ 126,680 $ 177,640 Accounts receivable 151,600 117,160 Merchandise inventory 619,200 571,600 Prepaid expenses 12,100 20,000 Equipment 358,480 252,400 Accumulated depreciation 83,560 104,560 Accounts payable 192,660 250,440 Current notes payable 28,400 20,000 Notes payable 210,000 121,600 Common shares 456,800 356,000 Retained earnings 296,640 286,200 Additional information regarding ICE Drilling's activities during 2020: 1. Loss on sale of equipment is $12,680. 2. Paid $71,480 to reduce a long-term note payable. 3. Equipment costing $111,000, with accumulated depreciation of $69,000, is sold for cash. 4. Equipment costing $217,080 is purchased by paying cash of $57,200 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 $140,360. 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 paid for equipment Cash received from sale of equipment Net cash outflow from investing activities Cash flows from financing activities: $ 1,078,360 $ 1,078,360 0 0 $ 1,078,360 $ 1,078,360