Suppose you are considering investing in two businesses, Zastre Associates and Chen Co$.$The two companies are virtually identical, and both began operations at the beginning of$2020.$ During the year, each company purchased inventory as follows:Jan. $10$Mar. $11$Jul. $9$Oct. $12$Totals$12,000$ units at $$7=$ $ $84,0005,000$ units at $$910,000$ units at $$1045,000100,00012,000$ units at $$11=132,00039,000$$$361,000$During $2020,$ both companies sold $30,000$ units of inventory.In early January $2020,$ both companies purchased equipment costing $$400,000$ that had a five$-$year estimated useful life and a $$40,000$ residual value. Zastre Associates uses the first$-$in$,$ first$-$out $($FIFO$)$ method for its inventory and straight$-$line amortization for its equipment.Chen Co$.$ uses the weighted$-$average method for inventory and DDB amortization. Both companies' trial balances at December $31,2020,$ included the following:Sales revenue....Operating expenses $($excluding amortization expense$)......$ $$560,000110,000598$ Part $2$ Accounting for Assets and LiabilitiesRequired$1.$ Prepare both companies' income statements$\mathrm{.}2.$ Write a memo to address the following long$-$term investment questions for your clients:Which company will have more cash to invest in promising projects? Which company would you prefer to invest in$?$ Why?