Instant Brake Inc.'s comparative balance sheet information at December 31, 2020 and 2019, and its income statement for the year ended December 31, 2020, are as follows: Instant Brake Inc. Income Statement December 31, 2020 Sales $875,000 Cost of goods sold 573,000 Gross profit $302,000 Operating expenses $132,690 Depreciation expense 41,250 173,940 Operating Profit 128,060 Loss on sale of 11,020 equipment Investment income 18,020 Profit before taxes 135,060 Income taxes 15,000 Profit $120,060 Instant Brake Inc. Balance Sheet Information December 31 2020 2019 Net Change Cash $ 45,000 $ 24,360 $ 20,640 Cash equivalents 23,780 9,000 14,780 Accounts receivable 87,720 34,440 53,280 Inventory 113,640 80,520 33,120 Investment Land Building and 0 23,780 76,200 76,200 425,950 443,970 (23,780) 0 (18,020) equipment Accumulated depreciation 115,080 93,960 21,120 Accounts payable 13,090 37,200 (24,110) Dividends payable 1,400 900 500 Bonds payable 21,000 0 21,000 Preferred shares 81,000 81,000 0 Common shares 405,480 405,480 0 Retained earnings 135,240 73,730 61,510 During 2020, the following transactions occurred: 1. Purchased equipment for $20,500 cash. 2. Sold the investment on January 1, 2020, for $41,800, resulting in investment income of $18,020. 3. Sold equipment for $7,370 cash that had originally cost $38,520 and had $20,130 of accumulated depreciation. 4. Issued $21,000 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.