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				$	1,110,600
Cost of goods sold					555,000
Gross profit				$	555,600
Operating expenses:
Depreciation expense	$	37,000
Other expenses		304,760
Total operating expenses					341,760
Profit from operations				$	213,840
Loss on sale of equipment					10,480
Profit before taxes				$	203,360
Income taxes					26,160
Profit				$	177,200

ICE Drilling Inc.
Comparative Balance Sheet Information
	December 31
	2020			2019
Cash	$	106,680		$	166,640
Accounts receivable		140,600			106,160
Merchandise inventory		608,200			560,600
Prepaid expenses		11,990			13,000
Equipment		356,280			241,400
Accumulated depreciation		72,560			93,560
Accounts payable		192,350			274,240
Current notes payable		17,400			9,000
Notes payable		210,000			119,400
Common shares		445,800			345,000
Retained earnings		285,640			246,600

Additional information regarding ICE Drillings activities during 2020:

1. Loss on sale of equipment is $10,480.
2. Paid $69,280 to reduce a long-term note payable.
3. Equipment costing $100,000, with accumulated depreciation of $58,000, is sold for cash.
4. Equipment costing $214,880 is purchased by paying cash of $55,000 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 $138,160.

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.)

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:

check all that apply 1

• increases caused by the purchase of merchandiseunanswered
• decreases caused by the purchase of merchandiseunanswered
• decreases caused by the sale of merchandiseunanswered
• increases caused by the sale of merchandiseunanswered

Prepaid expenses:

check all that apply 2

• increases caused by the purchase of prepaid items, i.e., such as the payment of rent or insurance in advanceunanswered
• decreases caused by the use of prepaid expensesunanswered
• decreases caused by the purchase of prepaid items, i.e., such as the payment of rent or insurance in advanceunanswered
• increases caused by the use of prepaid expensesunanswered

Notes payable:

check all that apply 3

• increases caused by the issuance of debt (borrowing)unanswered
• decreases caused by principal paymentsunanswered
• decreases caused by the issuance of debt (borrowing)unanswered
• increases caused by principal paymentsunanswered

Common shares:

check all that apply 4

• increases caused by the issuance of shares and/or share dividends unanswered
• decreases caused by the repurchase and/or cancellation of shares unanswered
• decreases caused by the issuance of shares and/or share dividends

Check my work 4 ICE Drilling Inc.'s balance sheet information and income statement are as follows: 10 points $1,110,600 555,000 $ 555,600 eBook ICE Drilling Inc. Income Statement For Year Ended December 31, 2020 Sales Cost of goods sold Gross profit Operating expenses: Depreciation expense $ 37,000 Other expenses 304,760 Total operating expenses Profit from operations Loss on sale of equipment Profit before taxes Income taxes Profit Print References 341,760 $ 213,840 10,480 $ 203,360 26,160 $ 177,200 ICE Drilling Inc. Comparative Balance Sheet Information December 31 2020 2019 Cash $ 106,680 $ 166,640 Accounts receivable 140,600 106,160 Merchandise inventory 608,200 560,600 Prepaid expenses 11,990 13,000 Equipment 356,280 241,400 Accumulated depreciation 72,560 93,560 Check my work 4 2019 10 points ICE Drilling Inc. Comparative Balance Sheet Information December 31 2020 Cash $ 106,680 $ 166,640 Accounts receivable 140,600 106,160 Merchandise inventory 608, 200 560,600 Prepaid expenses 11,990 13,000 Equipment 356,280 241,400 Accumulated depreciation 72,560 93,560 Accounts payable 192,350 274,240 Current notes payable 17,400 9,000 Notes payable 210,000 119,400 Common shares 445,800 345,000 Retained earnings 285,640 246,600 eBook Print References Additional information regarding ICE Drilling's activities during 2020: 1. Loss on sale of equipment is $10,480. 2. Paid $69,280 to reduce a long-term note payable. 3. Equipment costing $100,000, with accumulated depreciation of $58,000, is sold for cash. 4. Equipment costing $214,880 is purchased by paying cash of $55,000 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 $138,160. Required: Prepare a statement of cash flows for 2020 that reports the cash inflows and outflows from operating activities according to the Check my work 4 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.) 10 points ICE DRILLING INC. Statement of Cash Flows For Year Ended December 31, 2020 eBook Cash flows from operating activities: Print References Adjustments to reconcile profit to net cash inflows from operating activities: Cash flows from investing activities: Check my work 4 Cash flows from investing activities: 10 points eBook Print Cash flows from financing activities: References Check my work 4 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.) 10 points Merchandise inventory: eBook Print ? increases caused by the purchase of merchandise References decreases caused by the purchase of merchandise 1 decreases caused by the sale of merchandise 7 increases caused by the sale of merchandise Prepaid expenses: 7 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 Check my work 4 Prepaid expenses: 7 increases caused by the purchase of prepaid items, i.e., such as the payment of rent or insurance in advance 10 points ? decreases caused by the use of prepaid expenses eBook 1 decreases caused by the purchase of prepaid items, i.e., such as the payment of rent or insurance in advance Print 2 increases caused by the use of prepaid expenses References Notes payable: 7 increases caused by the issuance of debt (borrowing) ? decreases caused by principal payments 2 decreases caused by the issuance of debt (borrowing) ? increases caused by principal payments Check my work 4 7 increases caused by the issuance of debt (borrowing) ? decreases caused by principal payments 10 points 7 decreases caused by the issuance of debt (borrowing) 7 increases caused by principal payments eBook Print References Common shares: 7 increases caused by the issuance of shares and/or share dividends 7 decreases caused by the repurchase and/or cancellation of shares 7 decreases caused by the issuance of shares and/or share dividends ? increases caused by the repurchase and/or cancellation of shares