Cash Flows Income Statements
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Ponzi produced 100 chain letter kits this quarter, resulting in a total cash outlay of $10 per unit. It will sell 50 of the kits next quarter at a price of $11, and the other 50 kits in 2 quarters at a price of $12. It takes a full quarter for it to collect its bills from its cusotmers (Ignore possible sales in earlier or later quarters)
a. Prepare an income statment in excel for Ponzi for today and for each of the next three quarters. Ignore taxes.
b. What are the cash flows for the company today an in each of the next three quarters?
c. What is Ponzi's net working capital in each quarter?
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Solution Summary
The cash flows income statements are examined. The Ponzi's net working capital in each quarter are determined.
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Please refer to the attachment.
The calculations are presented in the attached table. Sales occur in quarters 2 and 3, so this is when the cost of goods sold is recognized. ...
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