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 $138,000 and sold them for $258,000 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 6 percent of sales. During the year, she paid $1,480 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.
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 $138,000 and sold them for $258,000 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 6 percent of sales. During the year, she paid $1,480 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.
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
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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 $138,000 and sold them for $258,000 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 6 percent of sales. During the year, she paid $1,480 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.
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT