Instant Brake Inc.'s comparative balance sheet information at December 31, 2020 and 2019, and its income...

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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 $889,000 566,000 Cost of goods sold. Gross profit $323,000 Operating expenses Depreciation expense Operating Profit 173,800 149,200 Loss on sale of equipment Investment income 155,780 Profit before taxes Income taxes 22,000 Profit $133,780 Instant Brake Inc. Balance Sheet Information December 31 2020 2019 Net Change Cash. $ 38,000 $ 22,960 $ 15,040 Cash equivalents 27,280 7,600 19,680 Accounts receivable 86,320 27,440 58,880 Inventory 112,240 73,520 38,720 Investment 0 27,280 (27,280) Land 74,800 74,800 0 Building and equipment 403,580 425,100 Accumulated depreciation 108,080 86,960 (21,520) 21,120 (29,980) Accounts payable 5,820 35,800 Dividends payable 2,400 1,600 800 Bonds payable 14,000 14,000 0 79,600 Preferred shares. 79,600 0 Common shares 404,080 404,080 0 Retained earnings 128,240 50,660 77,580 During 2020, the following transactions occurred: 1. Purchased equipment for $21,200 cash. 2. Sold the investment on January 1, 2020, for $48,800, resulting in investment income of $21,520. 3. Sold equipment for $7,720 cash that had originally cost $42,720 and had $20,060 of accumulated depreciation. 4. Issued $14,000 of bonds payable at face value. $132,620 41,180 14,940 21,520 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: Proceeds from sale of equipment Cash received from customers Cash paid for inventory 0 Cash flows from investing activities: Cash flows from financing activities: $ $ 0 0 0 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 $889,000 566,000 Cost of goods sold. Gross profit $323,000 Operating expenses Depreciation expense Operating Profit 173,800 149,200 Loss on sale of equipment Investment income 155,780 Profit before taxes Income taxes 22,000 Profit $133,780 Instant Brake Inc. Balance Sheet Information December 31 2020 2019 Net Change Cash. $ 38,000 $ 22,960 $ 15,040 Cash equivalents 27,280 7,600 19,680 Accounts receivable 86,320 27,440 58,880 Inventory 112,240 73,520 38,720 Investment 0 27,280 (27,280) Land 74,800 74,800 0 Building and equipment 403,580 425,100 Accumulated depreciation 108,080 86,960 (21,520) 21,120 (29,980) Accounts payable 5,820 35,800 Dividends payable 2,400 1,600 800 Bonds payable 14,000 14,000 0 79,600 Preferred shares. 79,600 0 Common shares 404,080 404,080 0 Retained earnings 128,240 50,660 77,580 During 2020, the following transactions occurred: 1. Purchased equipment for $21,200 cash. 2. Sold the investment on January 1, 2020, for $48,800, resulting in investment income of $21,520. 3. Sold equipment for $7,720 cash that had originally cost $42,720 and had $20,060 of accumulated depreciation. 4. Issued $14,000 of bonds payable at face value. $132,620 41,180 14,940 21,520 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: Proceeds from sale of equipment Cash received from customers Cash paid for inventory 0 Cash flows from investing activities: Cash flows from financing activities: $ $ 0 0 0

Answer rating: 100% (QA)

Solution Dividends paid in cash 55430 Instant Brake Inc Statement of Cash Flows For the Year ended D... View the full answer