Measure profitability based on different inventory and depreciation methods) Suppose you are considering investing in two businesses. La Petite France Baker and Burgers Ahoy. The two companies are virtually identical, and both began operations at tin beginning of the current year. During the year, each company purchased inventory: During the first year, both companies sold 25,000 units of inventor). 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. Burgers Ahoy uses the inventory and depreciation methods that minimize income tax payments. Assume that both companies' trial balances at December 31 included the following: The income tax rate is 40%. Requirements Prepare both companies' multiple-step income statements. Write an investment newsletter to address the following questions: Which company appears to be more profitable? Which company has more cash to invest in promising projects? If prices continue rising over the long term, which company would, you prefer to invest in? Why? (Challenge)