Required: Prepare a statement of cash flows for 2020 using the direct method to report cash...

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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.) Answer is complete but not entirely correct. ICE DRILLING INC. Statement of Cash Flows For Year Ended December 31, 2020 Cash flows from operating activities: Cash paid for income taxes Cash paid for merchandise inventory Cash paid for other expenses Cash received from customers Net cash inflow from operating activities (27,760) (47,600) X (306,360) X 0 $ (381,720) 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: Cash paid for dividends Cash received from issuing common shares Cash paid on notes payable Cash borrowed on current notes payable $ (56,600) 29,920 $ (139,760) ( 100,800 (70,880) 8,400 Net cash outflow from financing activities Net decrease in cash Cash balance at beginning of 2020 Cash balance at end of 2020 (26,680) (101,440) $ (509,840) 174,640 $ (335,200) 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: Depreciation expense Other expenses Total operating expenses Profit from operations Loss on sale of equipment Profit before taxes Income taxes Profit $1,112,200 563,000 $ 549,200 $ 45,000 306,360 ICE Drilling Inc. Comparative Balance Sheet Information 351,360 $ 197,840 12,080 $ 185,760 27,760 $ 158,000 Cash Accounts receivable December 31 2020 2019 $ 123,680 148,600 $174,640 114,160 Merchandise inventory 616,200 568,600 Prepaid expenses 12,070 17,000 Equipment 357,880 249,400 Accumulated depreciation 80,560 101,560 Accounts payable 195,030 255,840 Current notes payable 25,400 17,000 Notes payable 210,000 121,000 Common shares 453,800 353,000 Retained earnings 293,640 275,400 Additional information regarding ICE Drilling's activities during 2020: 1. Loss on sale of equipment is $12,080. 2. Paid $70,880 to reduce a long-term note payable. 3. Equipment costing $108,000, with accumulated depreciation of $66,000, is sold for cash. 4. Equipment costing $216,480 is purchased by paying cash of $56,600 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 $139,760. 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.) 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.) Answer is complete but not entirely correct. ICE DRILLING INC. Statement of Cash Flows For Year Ended December 31, 2020 Cash flows from operating activities: Cash paid for income taxes Cash paid for merchandise inventory Cash paid for other expenses Cash received from customers Net cash inflow from operating activities (27,760) (47,600) X (306,360) X 0 $ (381,720) 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: Cash paid for dividends Cash received from issuing common shares Cash paid on notes payable Cash borrowed on current notes payable $ (56,600) 29,920 $ (139,760) ( 100,800 (70,880) 8,400 Net cash outflow from financing activities Net decrease in cash Cash balance at beginning of 2020 Cash balance at end of 2020 (26,680) (101,440) $ (509,840) 174,640 $ (335,200) 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: Depreciation expense Other expenses Total operating expenses Profit from operations Loss on sale of equipment Profit before taxes Income taxes Profit $1,112,200 563,000 $ 549,200 $ 45,000 306,360 ICE Drilling Inc. Comparative Balance Sheet Information 351,360 $ 197,840 12,080 $ 185,760 27,760 $ 158,000 Cash Accounts receivable December 31 2020 2019 $ 123,680 148,600 $174,640 114,160 Merchandise inventory 616,200 568,600 Prepaid expenses 12,070 17,000 Equipment 357,880 249,400 Accumulated depreciation 80,560 101,560 Accounts payable 195,030 255,840 Current notes payable 25,400 17,000 Notes payable 210,000 121,000 Common shares 453,800 353,000 Retained earnings 293,640 275,400 Additional information regarding ICE Drilling's activities during 2020: 1. Loss on sale of equipment is $12,080. 2. Paid $70,880 to reduce a long-term note payable. 3. Equipment costing $108,000, with accumulated depreciation of $66,000, is sold for cash. 4. Equipment costing $216,480 is purchased by paying cash of $56,600 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 $139,760. 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.)