ICE Drilling Inc.'s balance sheet information and income statement are as follows: $1,111, 200 558,000 $ 553,200 ICE Drilling Inc. Income Statement For Year Ended December 31, 2020 Sales Cost of goods sold Gross profit Operating expenses: Depreciation expense $ 40,000 Other expenses 305,360 Total operating expenses Profit from operations Loss on sale of equipment Profit before taxes Income taxes Profit 345, 360 $ 207,840 11,080 $ 196,760 26,760 $ 170,000 ICE Drilling Inc. Comparative Balance Sheet Information December 31 2020 2019 Cash $ 109,680 $ 169,640 Accounts receivable 143,600 109,160 Merchandise inventory 611,200 563,600 Prepaid expenses 12,020 16,000 Equipment 356,880 244,400 NA Nort Saved ICE Drilling Inc. Comparative Balance Sheet Information December 31 2020 2019 Cash $ 109,680 $ 169,640 Accounts receivable 143,600 109, 160 Merchandise inventory 611,200 563,600 Prepaid expenses 12,020 16,000 Equipment 356,880 244,400 Accumulated depreciation 75,560 96,560 Accounts payable 189,980 268,840 Current notes payable 20,400 12,000 Notes payable 210,000 120,000 Common shares 448,800 348,000 Retained earnings 288,640 257,400 Additional information regarding ICE Drilling's activities during 2020: 1. Loss on sale of equipment is $11,080. 2. Paid $69,880 to reduce a long-term note payable. 3. Equipment costing $103,000, with accumulated depreciation of $61,000, is sold for cash. 4. Equipment costing $215,480 is purchased by paying cash of $55,600 and signing a long-term 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 $138,760. Pequired. Required: Prepare a statement of cash flows for 2020 that reports the cash inflows and outflows from operating activities according indirect method. (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: Profit Adjustments to reconcile profit to net cash inflows from operating activities: Depreciation expense Loss on sale of equipment Increase in accounts receivable Increase in merchandise inventory Decrease in prepaid expenses Decrease in accounts payable $ Cash flows from investing activities: Cash received from sale of equipment Increase in merchandise inventory Decrease in prepaid expenses Decrease in accounts payable 0 Cash flows from investing activities: Cash received from sale of equipment Cash paid for equipment 0 Cash flows from financing activities: 0 $ $ 0 Analysis Component: 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: 2 increases caused by the purchase of merchandise decreases caused by the purchase of merchandise ? decreases caused by the sale of merchandise 2 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 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) ***** 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 ? increases caused by the repurchase and/or cancellation of shares