ponzi Question 4 (of 32) 4. N0.00 points Ponzi Products produced 100 chain lette
ID: 2652289 • Letter: P
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ponzi Question 4 (of 32) 4. N0.00 points Ponzi Products produced 100 chain letter kits this quarter, resulting in a total cash outlay of $10 per unit It quarters and assume all positive cash flow is distributed as expenses or earnings to shareholders. ) a. Prepare an income statement for Ponzi for today and for each of the next three quarters. Ignore taxes. will sell 50 of the kits next quarter at a price of $11, and the other 50 kts in two quarters at a price of $12. It takes a full quarter for it to collect its bils trom its customers. (Ignore possible sales in earlier or later (Leave no cells blank- be certain to enter "O wherever required.) Quarter1 Quarter 2 Quarter 3 Quarter 4 550 Sales Cost of goods sold Net income 1000 b. What are the cash flows for the company today and in each of the next three quarters? (Leave no cells blank-be certain to enter "" wherever required. Negative amounts should be indicated by a minus sign.) Flow 1000 Quarter 1 Quarter 2 Quarter 3 Quarter 4 550 300 c. What is Ponzs net working capital in each quarter? (Leave no cells blank-be certain to enter "0 wherever required.) Net Working Capital Quarter 1 Quarter 2 Quarter 3 Quarter 4 1000 -450 150 150Explanation / Answer
Answer:
a.
Income Statement
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Sales
$ -
$ 550.00
$ 300.00
$ 300.00
(50 Kits * $11)
(25 Kits * $12)
(25 Kits * $12)
Less: Cost of Goods sold
$ 1,000.00
$ -
$ -
$ -
(100 Kits * $10)
Net income
$ (1,000.00)
$ 550.00
$ 300.00
$ 300.00
b.
Cash Flows
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Cash outlay for costs
$ (1,000.00)
Cash Inflow from Sales (One quarter delay)
$ -
$ -
$ 550.00
$ 300.00
Cash Flows
$ (1,000.00)
$ -
$ 550.00
$ 300.00
C.
Net working Capital
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Cash Balance
$ (1,000.00)
$ (1,000.00)
$ (450.00)
$ (150.00)
Accounts Receivables Balance
$ -
$ 550.00
$ 300.00
$ 300.00
Net working Capital
$ (1,000.00)
$ (450.00)
$ (150.00)
$ 150.00
a.
Income Statement
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Sales
$ -
$ 550.00
$ 300.00
$ 300.00
(50 Kits * $11)
(25 Kits * $12)
(25 Kits * $12)
Less: Cost of Goods sold
$ 1,000.00
$ -
$ -
$ -
(100 Kits * $10)
Net income
$ (1,000.00)
$ 550.00
$ 300.00
$ 300.00
b.
Cash Flows
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Cash outlay for costs
$ (1,000.00)
Cash Inflow from Sales (One quarter delay)
$ -
$ -
$ 550.00
$ 300.00
Cash Flows
$ (1,000.00)
$ -
$ 550.00
$ 300.00
C.
Net working Capital
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Cash Balance
$ (1,000.00)
$ (1,000.00)
$ (450.00)
$ (150.00)
Accounts Receivables Balance
$ -
$ 550.00
$ 300.00
$ 300.00
Net working Capital
$ (1,000.00)
$ (450.00)
$ (150.00)
$ 150.00
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