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 $147,000 and sold them for $276,000 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 3 percent of sales. During the year, she paid $1,770 cash to replace a defective tuner. Required a-1. Prepare an income statement for Delochs first year of operation. a-2. Prepare a statement of cash flows for Delochs first year of operation.