Jack, Inc. sells toy mice to high end pet stores. The company has been in business for many years and uses the calendar year for accounting purposes. It is a publicly owned company that is subject to all applicable laws and rules. The company uses the perpetual method to account for its inventory. 1. Income Statement: Sales: $84,080 Less: Sales Discount: $165 Net Sales: $83,915 Cost of Goods Sold: $16,510 Gross Profit: $67,405 Expenses: Rent Expense: $10,500 Salaries Expense: $20,000 Supplies Expense: $6,780 Depreciation Expense: $2,450 Interest Expense: $1,900 Utilities Expense: $5,400 Total Expenses: $47,030 Net Income: $20,375 (Gross Profit - Total Expenses) 2. Statement of Retained Earnings: Beginning Retained Earnings: $21,010 Add: Net Income: $20,375 Less: Dividends (not given, assumed to be $0) Ending Retained Earnings: $41,385 3. Balance Sheet: Assets: Cash: $67,460 Accounts Receivable: $25,500 Supplies: $4,000 Inventory: $8,275 Equipment: $44,000 Less: Accumulated Depreciation: $2,450 Net Equipment: $41,550 Total Assets: $146,785 Liabilities: Accounts Payable: $7,000 Rent Payable: $1,500 Loan Payable: $33,500 Interest Payable: $1,400 Total Liabilities: $43,400 Stockholders' Equity: Capital Stock: $62,000 Retained Earnings: $41,385 Total Stockholders' Equity: $103,385 Total Liabilities and Stockholders' Equity: $146,785 Calculate the current ratio and gross profit percentage and explain what they mean