Exercise 9-6A (Algo) Effect of warranties on income and cash flow LO 9-4 To support herself while attending school, Daun Deloch sold stereo systems to other students. During the first year of operations, Daun purchased the stereo systems for $160,000 and sold them for $270,000 cash. She provided her customers with a one-year warranty against defects in parts and labor. Based on industry standards, she estimated that warranty claims would amount to 2 percent of sales. During the year, she paid $3,020 cash to replace a defective tuner. Required a. Prepare an income statement and statement of cash flows for Daun's first year of operation. b. Based on the information given, what is Daun's total warranties liability at the end of the accounting period? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Prepare an income statement for Daun's first year of operation. DAUN'S STEREOS Income Statement Req A1 Req A2 > Req A1 Req A2 Req B Prepare a statement of cash flows for Daun's first year of operation. (Enter cash outflows and amounts to be deducted with a minus sign.) DAUN'S STEREOS Statement of Cash Flows Cash flows from operating activities: Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Ending cash balance Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Based on the information given, what is Daun's total warranties liability at the end of the accounting period? Total warranties liability < Req A2 Req B >