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: $1,112,000 562,000 $ 550,000 $ 44,000 306,160 Depreciation expense Other expenses Total operating expenses Profit from operations Loss on sale of equipment Profit before taxes Income taxes Profit 350,160 $ 199,840 11,880 $ 187,960 27,560 $ 160,400 ICE Drilling Inc. Comparative Balance Sheet Information December 31 2020 2019 Cash $122,680 $173,640 Accounts receivable 147,600 113,160 Merchandise inventory 615,200 567,600 Prepaid expenses 12,060 16,000 Equipment 357,680 248,400 Accumulated 79,560 100,560 depreciation Accounts payable 195,820 257,640 Current notes payable 24,400 16,000 Notes payable 210,000 120,800 Common shares 452,800 352,000 Retained earnings 292,640 271,800 Additional information regarding ICE Drilling's activities during 2020: 1. Loss on sale of equipment is $11,880. 2. Paid $70,680 to reduce a long-term note payable. 3. Equipment costing $107,000, with accumulated depreciation of $65,000, is sold for cash. 4. Equipment costing $216,280 is purchased by paying cash of $56,400 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 $139,560. 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.