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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 $ 885,000 Cost of goods sold 568,000 Gross profit $ 317,000 Operating expenses $ 132,640 Depreciation expense 41,200 173,840 Operating Profit 143,160 Loss on sale of equipment 13,820 Investment income 20,520 Profit before taxes 149,860 Income taxes 20,000 Profit $ 129,860 Instant Brake Inc. Balance Sheet Information December 31 2020 2019 Net Change Cash $ 40,000 $ 23,360 $ 16,640 Cash equivalents 26,280 8,000 18,280 Accounts receivable 86,720 29,440 57,280 Inventory 112,640 75,520 37,120 Investment 0 26,280 (26,280 ) Land 75,200 75,200 0 Building and equipment 412,400 432,920 (20,520 ) Accumulated depreciation 110,080 88,960 21,120 Accounts payable 10,040 36,200 (26,160 ) Dividends payable 2,400 1,400 1,000 Bonds payable 16,000 0 16,000 Preferred shares 80,000 80,000 0 Common shares 404,480 404,480 0 Retained earnings 130,240 59,680 70,560 During 2020, the following transactions occurred: Purchased equipment for $21,000 cash. Sold the investment on January 1, 2020, for $46,800, resulting in investment income of $20,520. Sold equipment for $7,620 cash that had originally cost $41,520 and had $20,080 of accumulated depreciation. Issued $16,000 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.)

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