You will be examining the financial statements of Tims Coffee Shoppe to analyze operations.

In looking at the financial statements provided in the simulation:

• How should the existing error in the financial statements be corrected? Why?
• Why is it important to make sure that the statements are correct?

Tim's Coffee Shoppe Income Statement For the Year Ended December 31, 2017 Income earned ......... $475,680 Expenses: Salaries expense Rent expense Depreciation expense Supplies expense Lease expense ............................ Tax expense Interest expense .......................... Insurance expense ............. 125,000 14,400 12,116 152.000 4,000 67,000 72,500 8.956 *** Total expenses Net income ........... 455,972 $19,708 Tim's Coffee Shoppe Balance Sheet December 31, 2017 Assets Current assets: Cash Supplies inventory Prepaid insurance Prepaid rent Total current assets Property, plant, and equipment: Office and store equipment Less accumulated depreciation Total property, plant, and equipment Total assets $ 32, 114.75 12040.00 2,070.80 2,430.50 $48,655.26 $35,015.25 7,125.89 $27,889.36 $76,544.62 Liabilities $1340.00 '112.90 Current liabilities Accounts payable Salaries payable Current portion- bank loan payable Total current liabilities 1245.83 ..$2,698.73 Long-term liabilities: Long-term portion- bank loan payable $3,895.38 $3,895.38 Total long-term liabilities Shareholder's Equity $69,950.51 Shareholder's equity