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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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During 2020, the following transactions occurred:
1. Purchased equipment for $20,700 cash.
2. Sold the investment on January 1, 2020, for $43,800, resulting in investment income of $19,020.
3. Sold equipment for $7,470 cash that had originally cost $39,720 and had $20,140 of accumulated depreciation.
4. Issued $19,000 of bonds payable at face value.
Required:
1. How much cash was paid in dividends?
Dividends paid
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.)
Cash flows from operating activities:
INSTANT BRAKE INC.
Statement of Cash Flows
For Year Ended December 31, 2020
Adjustments to reconcile profit to net cash inflows from operating activities:
Transcribed Image Text:During 2020, the following transactions occurred: 1. Purchased equipment for $20,700 cash. 2. Sold the investment on January 1, 2020, for $43,800, resulting in investment income of $19,020. 3. Sold equipment for $7,470 cash that had originally cost $39,720 and had $20,140 of accumulated depreciation. 4. Issued $19,000 of bonds payable at face value. Required: 1. How much cash was paid in dividends? Dividends paid 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.) Cash flows from operating activities: INSTANT BRAKE INC. Statement of Cash Flows For Year Ended December 31, 2020 Adjustments to reconcile profit to net cash inflows from operating activities:
11
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:
Sales
Cost of goods sold
Gross profit
Operating expenses
Depreciation expense
Operating Profit
Instant Brake Inc.
Income Statement
December 31, 2020
Loss on sale of equipment
Investment income
Profit before taxes
Income taxes
Profit
Cash
Cash equivalents
Accounts receivable
Inventory
Investment
Land
Building and equipment
Accumulated depreciation.
Accounts payable
Dividends payable
Bonds payable
Preferred shares
Common shares
$132,670
41,230
12,110
19,020
Instant Brake Inc.
Balance Sheet Information.
$879,000
571,000
$308,000
December 31
0
173,900
134,100
2020
2019
$ 43,000 $ 23,960
24,780
87,320
113,240
11,900
1,800
141,010
17,000
$124,010
19,000
80,600
405,080
78,520
24,780
75,800
75,800
420,530 439,550
113,050
91,960
36,800
1,100
0
8,600
32,440
80,600
405,080
Net Change
$ 19,040
16,180
54,880
34,720
24,780)
0
(19,020)
21,090
(24,900)
700
19,000
0
Transcribed Image Text:11 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: Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Operating Profit Instant Brake Inc. Income Statement December 31, 2020 Loss on sale of equipment Investment income Profit before taxes Income taxes Profit Cash Cash equivalents Accounts receivable Inventory Investment Land Building and equipment Accumulated depreciation. Accounts payable Dividends payable Bonds payable Preferred shares Common shares $132,670 41,230 12,110 19,020 Instant Brake Inc. Balance Sheet Information. $879,000 571,000 $308,000 December 31 0 173,900 134,100 2020 2019 $ 43,000 $ 23,960 24,780 87,320 113,240 11,900 1,800 141,010 17,000 $124,010 19,000 80,600 405,080 78,520 24,780 75,800 75,800 420,530 439,550 113,050 91,960 36,800 1,100 0 8,600 32,440 80,600 405,080 Net Change $ 19,040 16,180 54,880 34,720 24,780) 0 (19,020) 21,090 (24,900) 700 19,000 0
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