Go to Tim's Coffee Shoppe and look in the back office. Inside the file drawer, labeled "Business" isTim's Coffee Shoppe Income Statement for the year for 2011. This is the most recent record Tim has. (I copied and pasted the statement below)
This year, several large businesses are moving in around his coffee shop and he expects business toincrease. Tim needs to create a pro forma profit and loss (income) statement for this year, and youneed to help him.
In this assignment, discuss whether each area in the pro forma income statement will increase,decrease or stay the same due to large businesses moving into the neighboring buildings into hisarea and explain your rationale why that line item will increase, decrease or stay the same.Remember, Tim serves coffee to many people who work in the area, so he would certainly expect amajor increase in his business volume.
1) This assignment is not looking for dollar figures, but primarily your justification on why the line itemswill change, and what direction they will change, if any.
2) For the itemsyou feel will change make any assumptions based on theincreased sales volume and how it will affect income and expenses.