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 $300,000 and sold them for $410,000 cash. She provided her customers with a oneyear warranty against defects in parts and labor. Based on industry standards, she estimated that warranty claims would amount to 3 percent of sales, During the year, she paid $4,420 cash to replace a defective tuner: Required a. Prepare an income statement and statement of cash flows for Daun's tirst year of operation. b. Based on the informotion given, what is Daun's total warranties liablity at the end of the accounting period? Complete this question by entering your answers in the tabs below. Prepare an income statement for Daun's first year of operation. \begin{tabular}{|l|l|l|} \hline \multicolumn{2}{|c|}{ DAUN'S STEREOS } \\ \hline Statement of Cash Flows \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Net cash flow from operating activities & & \\ \hline Cash flows from imvesting activities & & \\ \hline Cash flows from financing activities & & \\ \hline Net change in cash & & \\ \hline \end{tabular} 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 Daun purchased the stereo systems for $300,000 and sold them for $410,000 cash. She provided her customers warranty against defects in parts and labor. Based on industry standards, she estimated that warranty claims would percent of sales. During the year, she paid $4,420 cash to replace a defective tuner. Required a. Prepare an income statement ss snd 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. Based on the information given, what is Daun's total warranties liability at the end of the accounting period