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To support herself while attending school , Daun Deloch sold stereo systems to other students . During the first year of operations , Dawn purchased the stereo systems for $260,000 and sold them for $370 000 cash . She provided her customers with a one- yea 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 $4 020 cash to replace a defective tuner Required Prepare an income statement and statement of cash ash flows for Dawn's first year of operation . ( Statement of Cash Flows only , items to be deducted must be indicated with a negative amount . ) DAUN'S STEREOS Income StatementDAUN'S STEREOS Statement of Cash Flows Cash flow from operating activities Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activitie Net change in cas Ending cash balance What is Daun's total warranties liability at the end of the accounting period ? Total warranties liability