Suppose you are an investment advisor and are looking at two companies to recommend to your clients, Blue Orchid Enterprises and Fast Track Systems. The two companies are virtually identical, and both...

Extracted text: Suppose you are an investment advisor and are looking at two companies to recommend to your clients, Blue Orchid Enterprises and Fast Track Systems. The two companies are virtually identical, and both have been in operation for one year. In early January 2020, both companies purchased equipment costing $183,000, with a 10-year estimated useful life and a $10,000 residual value. Blue Orchid uses the straight-line depreciation method. Fast Track uses the double- declining-balance method. Both companies' trial balances at December 31, 2020, included the following: Net Sales Revenue $ 870,000 Cost of Goods Sold 410,000 Operating Expenses (other than depreciation) 200,000 Requirements 1. Prepare both companies' income statements using their desired method of depreciation. You must show both income statements. 2. Write a letter to address the following questions for your clients: Which company appears to be more profitable? Which company would you prefer to invest in? Why? Is one method of depreciation better than the other? VWhy would you use either method?