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

31-Dec-20

Sales $883,000

Cost of goods sold 581,000

Gross profit 302,000

Operating expenses 132770

Depreciation expense 41330 174,100 .

Operating Profit 127,900

Loss on sale of equipment 6510

Investment income 14020 7510

Profit before taxes 135,410

Income taxes 23,000

Profit $112,410

Instant Brake Inc.

Balance Sheet Information

December 31,2020

2020 2019

Cash 53,000 25,960

Cash equivalents 19,780 10,600

Accounts receivable 89,320 42,440

Inventory 115,240 88,520

Investment 0 19,780

Land 77,800 77,800

Building and equipment 453,530 467,550

Accumulated depreciation 130,050 108,960

Accounts payable 14,500 38,800

Dividends payable 2,200 1,100

Bonds payable 29,000 0

Preferred shares 82,600 82,600

Common shares 407,080 407,080

Retained earnings 143,240 94,110

During 2020, the following transactions occurred:

Purchased equipment for $19,700 cash.

Sold the investment on January 1, 2020, for $33,800, resulting in investment income of $14,020.

Sold equipment for $6,970 cash that had originally cost $33,720 and had $20,240 of accumulated depreciation.

Issued $29,000 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 amounts.)