Refer to the information in Problem 16-5A. Prepare a statement of cash flows for 2020 using the direct method to report cash inflows and outflows 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.

Problem 16-5A

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ICE Drilling Inc. Comparative Balance Sheet Information ICE Drilling Inc. Income Statement For Year Ended December 31, 2020 December 31 Sales.. 1,111,600 2020 2019 Cost of goods sold. 560,000 Cash. $120,680 $171,640 Gross profit. Operating expenses: Depreciation expense. Other expenses.. Total operating expenses.. Profit from operations.. Loss on sale of equipment. 551,600 Accounts receivable. 145,600 111,160 Merchandise inventory.. 613,200 565,600 42,000 Prepaid expenses. 12,040 14,000 305,760 Equipment . Accumulated depreciation 357,280 246,400 347,760 77,560 98,560 203,840 Accounts payable. Current notes payable.. 197,400 261,240 11,480 22,400 14,000 Profit before taxes . Income taxes.. 192,360 Notes payable. 210,000 120,400 27,160 Common shares 450,800 350,000 Profit . 165,200 Retained earnings.. 290,640 264,600