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 $157,000 and sold them for $294,000 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 $1,970 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 $157,000 and sold them for $294,000 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 $1,970 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.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter6: Losses And Loss Limitations
Section: Chapter Questions
Problem 11P
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Transcribed Image Text: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 $157,000 and sold them for $294,000 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 $1,970 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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Complete this question by entering your answers in the tabs below.
Required A1
Required A2
Prepare a statement of cash flows for Deloch's first year of operation. (Cash outflows should be indicated with a minus sign.)
DELOCH STEREOS
Statement of Cash Flows
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