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. (Listany deduction in cash and cash outflows as negative amounts.)ICE DRILLING INC.Statement of Cash FlowsFor Year Ended December 31, 2020Cash flows from operating activities:Cash flows from investing activities:Cash flows from financing activities: ICE Drilling Inc's balance sheet information and income statement are as follows:ICE Drilling Inc.Income StatementFor Year Ended December 31, 2020Sales$1,112,600565,000$ 547,600Cost of goods soldGross profitOperating expenses:Depreciation expense47,000306,760Other expensesTotal operating expensesProfit from operationsLoss on sale of equipment353,760$ 193,84012,480$ 181,36028,160$ 153, 200Profit before taxesIncome taxesProfitICE Drilling Inc.Comparative Balance Sheet InformationDecember 3120202019$ 125,680$ 176,640116,160570,60019,000251,400103,560252,24019,000121,400355,000282,600CashAccounts receivableMerchandise inventoryPrepaid expensesEquipmentAccumulated depreciationAccounts payableCurrent notes payableNotes payable150,600618, 20012,090358, 28082,560193,45027,400210,000455,800295,640Common sharesRetained earningsAdditional information regarding ICE Drilling's activities during 2020:1. 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.

The question is based on the concept of Cash flow statement. Cash flow statement is the statement…

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 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:

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 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:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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