Question #2

To support herself while attending school, Daun Deloch sold stereo systems to other students. During the first year of operations, Deloch purchased the stereo systems for $168,000 and sold them for $316,000 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 4 percent of sales. During the year, she paid $1,780 cash to replace a defective tuner. Required a-1. Prepare an income statement for Deloch's first year of operation. a-2. Prepare a statement of cash flows for Deloch's first year of operation. Complete this question by entering your answers in the tabs below. Prepare an income statement for Deloch's first year of operation. To support herself while attending school, Daun Deloch sold stereo systems to other students. During the first year of operations, Deloch purchased the stereo systems for $168,000 and sold them for $316,000 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 4 percent of sales. During the year, she paid $1,780 cash to replace a defective tuner. Required a-1. Prepare an income statement for Deloch's first year of operation. a-2. Prepare a statement of cash flows for Deloch's first year of operation. Complete this question by entering your answers in the tabs below. Prepare a statement of cash flows for Deloch's first year of operation. (Cash outflows should be indicated with a minus sign.)