North Company engaged in the following transactions during Year 1:

1) Started the business by issuing $50,000 of common stock for cash.

2) The company paid cash to purchase $38,000 of inventory.

3) The company sold inventory that cost $17,000 for $33,000 cash.

4) Operating expenses incurred and paid during the year, $9,000.

North Company engaged in the following transactions during Year 2:

1) The company paid cash to purchase $35,000 of inventory.

2) The company sold inventory that cost $37,500 for $65,000 cash.

3) Operating expenses incurred and paid during the year, $18,000.

Note: North uses the perpetual inventory system.

REQUIRED:

1. Ford's gross margin for the Year 2 is:

2. The amount of retained earnings at December 31, Year 2 is: