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

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

Additional information regarding ICE Drilling’s activities during 2014:
1. Loss on sale of equipment is $11,480.
2. Paid $70,280 to reduce a long-term note payable.
3. Equipment costing $105,000, with accumulated depreciation of $63,000, is sold for cash.
4. Equipment costing $215,880 is purchased by paying cash of $56,000 and signing a long-term note payable for the balance.
5. Borrowed $8,400 by signing a short-term note payable.
6. Issued 5,600 common shares for cash at $18 per share.
7. Declared and paid cash dividends of $139,160.

Required
Prepare a statement of cash flows for 2014 that reports the cash inflows and outflows from operating activities according to the indirect method. Show your supporting calculations. Also prepare a note describing non-cash investing and financing activities.
Analysis Component: Merchandise Inventory, Prepaid Expenses, Long-Term Notes Payable, and Common Shares are some of the accounts that changed during 2014. Explain what transactions likely caused each of these accounts to increase and/ordecrease.

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ICE Drilling Inc. Comparative Balance Sheet Information ICE Drilling Inc. Income Statement December 31 For Year Ended December 31, 2014 2014 2013 Sales $1,111,600 560,000 S 551,600 Cash $120,680 $171,640 Cost of goods sold Gross profit. Operating expenses: Depreciation expense. Accounts receivable 145,600 111,160 Merchandise inventory Prepaid expenses Equipment. Accumulated depreciation. 613,200 565,600 14,000 12,040 $ 42,000 305,760 357,280 246,400 98,560 Other expenses.. 77,560 Total operating expenses.. Loss on sale of equipment. Income from operations. 347,760 Accounts payable. Short-term notes payable 197,400 261,240 11,480 $ 192,360 27,160 S 165,200 22,400 14,000 Long-term notes payable. 210,000 120,400 Income taxes... 350,000 264,600 Common shares. 450,800 Net income... ....... Retained eamings... . 290,640