War in the 1960's

AB299-02 Unit 6

March 2, 2012

Joseph Green

Joseph Green

AB299-02 Unit 6

March 2, 2012

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.

Tim’s salary expenses will increase due to the large business moving into the neighboring buildings in his area. Which in turn mean extra hours for employees or new hires to better serve customers. I believe the rent expense will stay the same no matter how many new people he hires or how many customers they serve. The supplies will definitely increase due to the simple fact they’re going to have many new customers (workers). The lease on the refrigerator will stay the same until you decide you want to own it. Taxes will change every year because it’s calculated by multiplying the appropriate tax rate of an individual or business by their income before taxes, which definitely is going to change due to the extra customers. The interest expense will decrease each year because the amount is reported by the company as an expense for borrowed money would decrease due to profits Tim’s Coffee Shoppe is making. Thanks to the new businesses and jobs that will soon bring more families. Totaling all that up increases the total expenses just a little bit only to make the net income rewarding.