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Question - 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 $162,000 and sold them for $304,000 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 5 percent of sales. During the year, she paid $2,620 cash to replace a defective tuner.
Required -
1. Prepare an income statement for Deloch's first year of operation.
2. Prepare a statement of cash flows for Deloch's first year of operation.
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