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 $190,000 and sold them for $300,000 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 2 percent of sales. During the year, she paid $3,320 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.)
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 $190,000 and sold them for $300,000 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 2 percent of sales. During the year, she paid $3,320 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Answer full question.
![**DAUN’S STEREOS**
**Statement of Cash Flows**
- **Cash flow from operating activities:**
- [Blank rows with no data]
- **Net cash flow from operating activities:** $0
- **Cash flows from investing activities:** $0
- **Cash flows from financing activities:** $0
- **Net change in cash:** $0
- **Ending cash balance:** $0
---
**Question:** What is Daun’s total warranties liability at the end of the accounting period?
- **Total warranties liability:** [Blank box]
**Graph Explanation:**
The table presented is a financial statement summarizing the cash flows of "Daun's Stereos" for a particular accounting period. The statement is divided into sections for operational, investing, and financing activities, each showing cash flow values. Currently, all fields display zeros, indicating there might be no transactions recorded during the period or it's a template for educational purposes. The question below inquires about the company’s total warranties liability, but no data is provided.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbac5cd56-9885-4a25-8e51-dfc1bb78a29e%2Facede06d-0bc4-4b51-a1a3-14dd08bacb36%2Flk95grm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**DAUN’S STEREOS**
**Statement of Cash Flows**
- **Cash flow from operating activities:**
- [Blank rows with no data]
- **Net cash flow from operating activities:** $0
- **Cash flows from investing activities:** $0
- **Cash flows from financing activities:** $0
- **Net change in cash:** $0
- **Ending cash balance:** $0
---
**Question:** What is Daun’s total warranties liability at the end of the accounting period?
- **Total warranties liability:** [Blank box]
**Graph Explanation:**
The table presented is a financial statement summarizing the cash flows of "Daun's Stereos" for a particular accounting period. The statement is divided into sections for operational, investing, and financing activities, each showing cash flow values. Currently, all fields display zeros, indicating there might be no transactions recorded during the period or it's a template for educational purposes. The question below inquires about the company’s total warranties liability, but no data is provided.
![**Transcription for Educational Website:**
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 $190,000 and sold them for $300,000 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 2 percent of sales. During the year, she paid $3,320 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.)*
**Diagram Explanation:**
The image contains an incomplete income statement table for "Daun's Stereos." Below are the fields in the table:
- [blank space for entering data]
- [blank space for entering data]
- [blank space for entering data]
- [a row for totaling the balance, shown as zero]
The table provides a structure for detailing income and expenses to calculate net income for the period.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbac5cd56-9885-4a25-8e51-dfc1bb78a29e%2Facede06d-0bc4-4b51-a1a3-14dd08bacb36%2Fkbn5sy_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Transcription for Educational Website:**
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 $190,000 and sold them for $300,000 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 2 percent of sales. During the year, she paid $3,320 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.)*
**Diagram Explanation:**
The image contains an incomplete income statement table for "Daun's Stereos." Below are the fields in the table:
- [blank space for entering data]
- [blank space for entering data]
- [blank space for entering data]
- [a row for totaling the balance, shown as zero]
The table provides a structure for detailing income and expenses to calculate net income for the period.
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