Explore BrainMass

Explore BrainMass

    Cash Flows Income Statements

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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?

    © BrainMass Inc. brainmass.com November 24, 2022, 11:52 am ad1c9bdddf

    Solution Preview

    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. ...

    Solution Summary

    The cash flows income statements are examined. The Ponzi's net working capital in each quarter are determined.