Industrial Maids Service Ltd. (IMS) is a corporation based in Sarnia, Ontario that focuses on cleaning commercial properties, which is a very competitive business. Although IMS tries to recruit highly trained employees, it is not able to pay a very high hourly salary. Cleaning services are charged to clients by the hour and the average rate is $17 per hour. Some of the cleaning done by this company is performed with larger equipment that is repaired by the company. The average employee will work an entire shift at one client s premises. Prestige Cleaning Services Inc. (PCS) also operates a cleaning service in Sarnia but this company focuses on residential cleaning and targets large homes in high-income areas. The company is owned by a former NHL star who is very effective at securing cleaning contracts. Most of the cleaning work done by this company occurs during the day and the company is able to attract experienced cleaning staff and pay them a higher salary. Cleaning services are charged to clients by the hour and the average rate is $30 per hour. The equipment used by this company is inexpensive. Most employees will clean two or three houses during a single shift so the company owns several vehicles. Listed below are condensed income statements of the two corporations: _____________________________________IMS……………………………….PCS Service revenue………………………..$1,020,000…………………………..$900,000 Salaries expense……
