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 $140,000 and sold them for $250,000 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 $2,820 cash to replace a defective tuner.

Required a. Prepare an income statement and statement of cash flows for Dauns first year of operation. b. Based on the information given, what is Dauns total warranties liability at the end of the accounting period?

Accounts payable

Accounts receivable

Accumulated depreciation

Allowance for doubtful accounts

Cash

Common stock

Cost of goods sold

Depreciation expense

Discount on notes payable

Dividends

Employee income tax payable

Employee medical insurance expense

Employee medical insurance payable

Employee pension expense

Employee pension payable

Employee savings plan

Equipment

Federal unemployment tax payable

FICA tax payable-Medicare

FICA tax payable-Social Security

Interest expense

Interest payable

Interest receivable

Interest revenue

Land

Merchandise inventory

Miscellaneous sales

Notes payable

Notes receivable

Payroll tax expense

Premium on notes payable

Prepaid rent

Retained earnings

Salaries expense

Salaries payable

Sales revenue

Sales tax payable

State income tax payable

State unemployment tax payable

Supplies

Uncollectible accounts expense

Unearned revenue

Vacation pay expense

Vacation pay payable

Warranties payable

Warranty expense

Net income

Net loss

Inflow from customers

Inflow from expenses

Inflow from interest

Inflow from loan

Inflow from sales tax

Outflow for customers

Outflow for interest

Outflow for loan

Outflow for sales tax

Outflow for warranty expense

Outflow to purchase inventory

Plus: Beginning cash balance

Less: Beginning cash balance

Complete this question by entering your answers in the tabs below. Prepare an income statement for Daun's first year of operation. Complete this question by entering your answers in the tabs below. Prepare a statement of cash flows for Daun's first year of operation. (Enter cash outflows and amounts to be deducted with a minus sign.) Complete this question by entering your answers in the tabs below. Based on the information given, what is Daun's total warranties liability at the end of the accounting period