Suppose you are considering investing in two businesses, Shelly's Seashell Enterprises and Jeremy Feigenbaum Systems. The two companies are virtually identical, and both begain operations at the beginning of the current year. During the year, each company purcahsed inventory as follows:

During the first year, both companies sold 25,000 units of inventory. In early January, both companies purchaed equipment costing $143,000, with a 10-year estimated useful life and a $20,000 residual value. Shelly uses the inventory and depreciation methods that maximize reported income (FIFO and straight-line). By contrast, Feigenbaum uses the inventory and depreciation methods that minimize income taxes (LIFO and double-declining-balance). Both companies' trial balances at December 31 included the following:

Sales Revenue- $270,000 Operating expenses- $80,700.

R1. Prepare both companies' income statements.