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				$	881,000
Cost of goods sold					580,000
Gross profit				$	301,000
Operating expenses	$	132,760
Depreciation expense		41,320			174,080
Operating Profit					126,920
Loss on sale of equipment		5,970
Investment income		13,520
Profit before taxes					134,470
Income taxes					22,000
Profit				$	112,470

Instant Brake Inc.
Balance Sheet Information
	December 31
	2020			2019			Net Change
Cash	$	52,000		$	25,760		$	26,240
Cash equivalents		19,280			10,400			8,880
Accounts receivable		89,120			41,440			47,680
Inventory		115,040			87,520			27,520
Investment		0			19,280			19,280	)
Land		77,600			77,600			0
Building and equipment		450,420			463,940			(13,520	)
Accumulated depreciation		125,050			103,960			21,090
Accounts payable		16,890			38,600			(21,710	)
Dividends payable		2,000			1,000			1,000
Bonds payable		28,000			0			28,000
Preferred shares		82,400			82,400			0
Common shares		406,880			406,880			0
Retained earnings		142,240			93,100			49,140

During 2020, the following transactions occurred:

1. Purchased equipment for $19,600 cash.
2. Sold the investment on January 1, 2020, for $32,800, resulting in investment income of $13,520.
3. Sold equipment for $6,920 cash that had originally cost $33,120 and had $20,230 of accumulated depreciation.
4. Issued $28,000 of bonds payable at face value.

Required: 1. How much cash was paid in dividends?

2. Prepare a statement of cash flows for Instant Brake for the year ended December 31, 2020, using the indirect method. (List any deduction in cash and cash outflows as negative amo