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 $240,000 and sold them for $350,000 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 $3,820 cash to replace a defective tuner. Required Prepare an income statement and statement of cash flows for Daun'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 Statement

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 $240,000 and sold them for $350,000 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 $3,820 cash to replace a defective tuner. Required Prepare an income statement and statement of cash flows for Daun'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 Statement

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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James was a high school teacher earning a net salary of $4500 per month. Afterworking for one year, he quit his job to start his own kiosk business dealing in variousconsumer goods. In order to learn how to run the business, James enrolled in aTAFE to acquire accounting skills. James’ course was for 6 months. James had topay $3,000 as tuition for the 3 months.After the training, James borrowed $40,000.00 from his uncle whom he pays 8percent interest per year.Also, James withdrew $ 50,000 from his savings account. He had been earning 5percent interest per year for this account. Further, to start the business James usedhis own premises given to him by his father.His father had been receiving $11,000 from rent per year. Finally, to start thebusiness James uses $75,000 he had been given by his father to go on holiday toThe USA.James’s first year of business can be summarised as follows:4HI5003 Economics for Business -2020 T3 Tutorial Submission AssessmentItem Amount $Revenue- Orange…
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James was a high school teacher earning a net salary of $4500 per month. After working for one year, he quit his job to start his own kiosk business dealing in various consumer goods. In order to learn how to run the business, James enrolled in a TAFE to acquire accounting skills. James’ course was for 6 months. James had to pay $3,000 as tuition for the 3 months. After the training, James borrowed $40,000.00 from his uncle whom he pays 8 percent interest per year. Also, James withdrew $ 50,000 from his savings account. He had been earning 5 percent interest per year for this account. Further, to start the business James used his own premises given to him by his father. His father had been receiving $11,000 from rent per year. Finally, to start the business James uses $75,000 he had been given by his father to go on holiday to USA. James’s first year of business can be summarised as follows: "image" Based on your calculations of accounting profit and economic profit, would you advise…
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