Answer:
a) Ponzi Products
Income statement
For quarters 1, 2, 3 and 4 of year 202x
Q1 Q2 Q3 Q4
Sales revenue $0 $550 $600 $0
COGS $0 $500 $500 $0
Operating income $0 $50 $100 $0
Since no products are sold during the first and fourth quarter, their respective revenues, COGS and operating income is $0.
b) Ponzi Products
Schedule of Expected Cash Receipts
For quarters 1, 2, 3 and 4 of year 202x
Q1 Q2 Q3 Q4
Sales revenue $0 $0 $550 $600
Cost of goods man. ($1,000) $0 $0 $0
Net cash receipts ($1,000) $0 $550 $600
c) This question is incomplete, it should say what is Ponzi's net working capital for each quarter?
NWC = current assets - current liabilities
NWC Q1 = $1,000 (Merchandise inventory account, no liabilities)
NWC Q2 = $500 (Merchandise inventory account, no liabilities)
NWC Q3 = $550 (Cash account, no liabilities)
NWC Q4 = $1,150 (Cash account, no liabilities)
