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AB 299 Unit 6 Assignment Impact to Profit and Loss
Statement
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Go to Tim’s Coffee Shoppe and look in the back office. Inside the file
drawer labeled “Business” is Tim’s Coffee Shoppe Income Statement
for the year for 2011. This is the most recent record Tim has. This
year, several large businesses are moving in around his coffee shop
and he expects business to increase. Tim needs to create a pro forma
profit and loss (income) statement for this year, and you need 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 his area 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 a major increase in his
business volume.
This assignment is not looking for dollar figures, but primarily your
justification on why the line items will change and what direction they
will change, if any. You may make assumptions based on the increased
sales volume and how it will affect income and expenses, if and when
you do make these assumptions, please describe them and their effects
on each line item.