Instant Brake Inc.'s comparative balance sheet information at December 31, 2020 and 2019, and its income statement for the ended December 31, 2020, are as follows: Instant Brake Inc. Income Statement December 31, 2020 Sales $883,000 Cost of goods sold 581,000 Gross profit $302,000 Operating expenses $132,770 Depreciation expense 41,330 174,100 Operating Profit 127,900 Loss on sale of equipment 6,540 Investment income 14,020 Profit before taxes 135,380 Income taxes Profit 23,000 $112,380 Instant Brake Inc. Balance Sheet Information 2020 December 31 2019 Net Change Cash Cash equivalents Inventory $ 53,000 $ 25,960 $ 27,040 19,780 10,600 9,180 Accounts receivable 89,320 42,440 46,880 115,240 88,520 26,720 Investment 0 19,780 (19,780) Land 77,800 77,800 0 Building and equipment 453,530 467,550 (14,020) Accumulated depreciation 130,080 108,960 Accounts payable 14,470 38,800 21,120 (24,330) Dividends payable 2,200 Bonds payable 29,000 1,100 0 1,100 29,000 Preferred shares 82,600 Common shares 407,080 82,600 407,080 0 0 Retained earnings 143,240 94,110 49,130 During 2020, the following transactions occurred: 1. Purchased equipment for $19,700 cash. 2. Sold the investment on January 1, 2020, for $33,800, resulting in investment income of $14,020. 3. Sold equipment for $6,970 cash that had originally cost $33,720 and had $20,210 of accumulated depreciation. 4. Issued $29,000 of bonds payable at face value. Other information: a. All sales are credit sales. b. All credits to accounts receivable in the period are receipts from customers. c. All purchases of merchandise are on credit. d. All debits to accounts payable in the period result from payments for merchandise. e. Other operating expenses are cash expenses. f. Income taxes are cash 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.) INSTANT BRAKE INC. Statement of Cash Flows For Year Ended December 31, 2020 Cash flows from operating activities: Cash received from customers Cash paid for inventory Cash paid for operating expenses Cash paid for income taxes Cash flows from investing activities: Purchase of equipment Cash flows from financing activities: Payment of dividend Net increase in cash and cash equivalents Cash and cash equivalents, January 1, 2020 Cash and cash equivalents, December 31, 2020 (132,770) (23,000) $ (155,770) $ 0 0