Suppose you are an investment advisor and are looking at two companies to recommend to your clients. The two companies are virtually identical, and both began operations at the beginning of the current year. In early January 2014, both companies purchased equipment costing $143,000 with a 10-year estimated useful life and a $20,000 residual value. One company uses the straight-line method. By contrast, the other company uses double-declining balance. Both companies trial balances at December 31, 2014 included the following:

Sales Revenue = $270,000

COGS = $70,000

Operating Expenses (other than depreciation) = $80,700

Prepare both companies income statements for the year just ended, after depreciation expense is recorded. (1) Which company appears to be more profitable? (2) Which company would you prefer to invest in? Why?