Kate is very pleased with the results of the first year of operations for Kate's Cards. She ended the year on a high note, with the company's reputation for producing quality cards leading to more business than she can currently manage. Kate is considering expanding and bringing in several employees. In order to do this, she will need to find a larger location and purchase more equipment. All this means additional financing. Kate has asked you to look at her year-end financial statements as if you were a banker considering giving Kate a loan. Comment on your findings and provide calculations to support your comments. KATE'S CARDS Income Statement Year Ended August 31 Sales revenue Cost of goods sold Gross profit. Operating expenses Wages Consulting. Insurance Utilities Rent Depreciation Total operating expenses Income from operations Interest expense. Income before income tax Income tax expense Net income $185,000106,00079,000 18,00011,8501,2002,40014,4003,25051,10027,90090027,0005,400$21,600 KATE'S CARDS Balance Sheet August 31 Assets Current assets Cash Accounts receivable Inventory Prepaid insurance. . Total current assets Equipment Accumulated depreciation Total assets. . . Liabilities Current liabilities Accounts payable Unearned revenue Other current liabilities Total current liabilities Note payable. Total liabilities Stockholders' equity Common stock . . Additional paid-in-capital Preferred stock. Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $17,40011,00016,0001,00045,40017,5003,250$59,650 $6,200 1,250 9,3501,900 24,35015,000 5009,5005,00020,30035,300$59,650 ourstanaing ani suv cuninivi miaies vutoraniming. and $2 per share on the common shares