ICE Drilling Inc.s balance sheet information and income statement are as follows:

ICE Drilling Inc.
Income Statement
For Year Ended December 31, 2017
Sales				$	1,112,600
Cost of goods sold					565,000
Gross profit				$	547,600
Operating expenses:
Depreciation expense	$	47,000
Other expenses		306,760
Total operating expenses					353,760
Profit from operations					193,840
Loss on sale of equipment					12,480
Profit before taxes				$	181,360
Income taxes					28,160
Profit				$	153,200

ICE Drilling Inc.
Comparative Balance Sheet Information
	December 31
	2017			2016
Cash	$	125,680		$	176,640
Accounts receivable		150,600			116,160
Merchandise inventory		618,200			570,600
Prepaid expenses		12,090			19,000
Equipment		358,280			251,400
Accumulated depreciation		82,560			103,560
Accounts payable		193,450			252,240
Current notes payable		27,400			19,000
Notes payable		210,000			121,400
Common shares		455,800			355,000
Retained earnings		295,640			282,600

Additional information regarding ICE Drillings activities during 2017: 1. Loss on sale of equipment is $12,480. 2. Paid $71,280 to reduce a long-term note payable. 3. Equipment costing $110,000, with accumulated depreciation of $68,000, is sold for cash. 4. Equipment costing $216,880 is purchased by paying cash of $57,000 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 $140,160.

Required: Prepare a statement of cash flows for 2017 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 2017. 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 checkmark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

ICE DRILLING INC. Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities: Adjustments to reconcile profit to net cash inflows from operating activities: Cash flows from investing activities: 0 Cash flows from financing activities: 0 0 Merchandise inventory increases caused by the purchase of merchandise decreases caused by the purchase of merchandise decreases caused by the sale of merchandise 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 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) 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