BYP10-5 Pinson Company and Estes Company are two proprietorships that are similar in many respects. One difference is that Pinson Company uses the straight-line method and Estes Company uses the declining-balance method at double the straight-line rate. On January 2, 2015, both compa- nies acquired the depreciable assets shown below. Asset Cost Salvage Value Useful Life Buildings $360,000 $20,000 40 years Equipment 130,000 10,000 10 years Including the appropriate depreciation charges, annual net income for the companies in the years 2015, 2016, and 2017 and total income for the 3 years were as follows. 2015 2016 2017 Total Pinson Company $84,000 $88,400 $90,000 $262,400 Estes Company 68,000 76,000 85,000 229,000 At December 31, 2017, the balance sheets of the two companies are similar except that Estes Company has more cash than Pinson Company. Lynda Peace is interested in buying one of the companies. She comes to you for advice. 10 Plant Assets, Natural Resources, and Intangible Assets Instructions With the class divided into groups, answer the following. (a) Determine the annual and total depreciation recorded by each company during the 3 years. (b) Assuming that Estes Company also uses the straight-line method of depreciation instead of the declining-balance method as in (a), prepare comparative income data for the 3 years. (c) Which company should Lynda Peace buy? Why