Year 2 3 4 Question 2: (30 points) There are three companies (A,B,C), all of which started business on January 1, 2016. Each of them started the business by investing $100,000 in cash. Each bought in cash a piece of equipment worth $25,000 with a service life of 5 years and salvage value of $1,000 on January 2, 2016. The useful life of the equipment in units of production is 120,000 units. Estimated units of production for each year are as follows: Number of Units 15,000 25,000 40,000 30,000 10,000 During the year, the three companies made all purchases and sales on credit. Each had selling expenses of $12,500 and administrative expenses of $500, which were paid in cash. The purchase prices and sales prices of merchandise were same for the three companies as follows: Date Purchases Sales Units Unit Cost (5) Unit Selling Price ($) January 10, 2016 15 1.000 January 31, 2016 1,250 April 5, 2016 1.100 April 10, 2016 1.150 May 15, 2016 15 1,500 August 30, 2016 1,200 October 5, 2016 5 1.600 October 10, 2016 1,700 November 2, 2016 10 1.250 December 30, 2016 10 1,750 Company A uses Weighted Average Method for inventory valuation and Straight Line depreciation method. Company B uses FIFO for inventory valuation and Units of Production depreciation method. Company Cuses LIFO for inventory valuation and Double Declining Balance depreciation method. Required: Prepare the Balance Sheet and the Income Statement for the year ending 2016 for each company. Units 10 20 10 5 10