Answer:
Explanation:
From the given information: we are to:
a)  Prepare an income statement for Ponzi for today and for each of the next three quarters. Ignore taxes. (LO1)
An income statement involves depicts the achievement of a certain business over  a period of time .
The income statement for Ponzi for today and for each of the next three quarters is as follows:
                         Quarter 1      Quarter 2       Quarter 3        Quarter 4
Sales                   $0                  $550              $600             $0
  (-) 
cost of goods       0                   $500              $500             $0
sold 
Net income           0                  $50                 $100               0
We will see that  in the first and the fourth quarter ; the firm neither pay any cash to purchase goods nor collect cash for sales. Thus ; the cashflow will be zero in those instances and we will consider only the second and the fourth quarter for sales income and production cost.
SO:
Quarter 2 sales = 50 × 11 = $550 
Quarter 3 sales = 50 × 12 = $600
(b) What are the cash flows for the company today and in each of the next three quarters?
Cash flow is like a database that helps to keep tracks and records the cash inflows and cash outflows of a financial instrument.
The cash flow in each month is as follows:
                         Quarter 1      Quarter 2       Quarter 3        Quarter 4
Sales                   $0                  $550              $600             $0
  (-) 
cost of goods       0                   $500              $500             $0
sold 
Net income           0                  $50                 $100               0
Inventories         $1000          $500                   0                  0
Account
Receivables       0                    550                  600                0
Net working
capital                 $1000          $1050             $600                0
Change in WC   $1000           $50                 $450              $600
CashFlow           $1000          $0                  $550              $600
Hint:
The Cash flow = net income - change in net working capital
The net working capital = Inventory + Account receivables
Quarter 2 sales = 50 × 11 = $550 
Quarter 3 sales = 50 × 12 = $600
(c) What is Ponzi’s net working capital in each quarter? (LO1)
The net working capital in each quarter can be illustrated as :
                         Quarter 1      Quarter 2       Quarter 3        Quarter 4
Inventories        $1000             $500              0                    $0
Account recei-    0                   $550              $600             $0
vables
Net working       $1000             $1050           $600               $0
capital