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Decision Cases Case 1. (Learning Objectives 2, 3: Measuring profitability based on different inventory and depreciation methods) Suppose you are considering investing in two businesses, La Petite France Bakery and Burgers Ahoyl. The two companies are virtually identical, and both began operations at the beginning of the current year. During the year, each company purchased inventory as follows: 10,000 unis at $140000 5000 nits 2,000 pr 000 unirsat No 27 Fotals $1774000 During the first year, both companies sold 25,000 units of inventory. In early January, both companies purchased equipment costing $150,000 that had a 10-year estimated useful life and a $20,000 residual value. La Petite France uses the inventory and depreciation methods that maximize reported income. By contrast, B inventory and depreciation methods that minimize income tax pa companies' trial balances at December 31 included the following: urgers uses the yments. Assume that both les revenue Operating expenses.. $350 000 50,000 The income tax rate is 40%.;:,:.:- I Requirements 1. Prepare both companies' income statements. 2, Write an investment newsletter to address the following questions: Which company appears to jects? If prices continue rising over the long term, which company would you prefer pro to invest in? Why? (Challenge)