In June 2016, Jolicure Inc. (Jolicure) and Horsefly Inc. (Horsefly) each began operations. Each company was formed with an initial capital contribution of $100,000. During the years ended May 31, 2017 and 2018, each company had revenue of $225,000 and total expenses of $175,000, before accounting for passive investments.

During fiscal 2017, each company purchased 3,000 shares of Nictaux Ltd. (Nictaux), a public company, for $12 per share. On May 31, 2017 and 2018 respectively the fair value of Nictaux's shares was $20 and $15. On May 31, 2017, each company had total assets (excluding the shares in Nictaux) of $200,000 and total liabilities of $50,000. On May 31, 2018, each company had total assets (excluding the shares in Nictaux) of $275,000 and total liabilities of $75,000. Jolicure accounts for the shares as fair value through profit and loss while Horsefly accounts for them as fair value through other comprehensive income.

Required:

a. Prepare summarized balance sheets and income statements for Jolicure and Horsefly as of May 31, 2017 and 2018.

b. Which company performed better in each year? What is the impact of using fair value through profit and loss versus fair value through other comprehensive income on the reported performance of the company?