(SOLVED) Ponzi Products produced 100 chain letter kits in the first


Question Description:

$15

Ponzi Products produced 100 chain letter kits in the first quarter, Q1, resulting in a Q1 total cash outlay of $10 per unit. It will sell 50 of the kits next quarter, Q2, at a price of $11, and the other 50 kits in Q3 at a price of $12. It takes a full quarter for it to collect its bills from its customers. (Ignore possible sales in earlier or later quarters.) In your answers, state any assumptions you make.
a. Prepare an income statement for Ponzi for Q1, Q2, Q3, and Q4. Ignore taxes.
b. What is Ponzi’s net working capital in each quarter?
c. What are the cash flows for the company in each of the four quarters?

Answer

$15