Company financial statements

MMM company is a recently formed limited liability company which provides training and educational services.The company was formed with an authorised share capital of 1000 000 $ 1 shares.The three shareholders ,who are also directors each purchased 120 000 shares at $1.40 per share.It is expected that the business will grow rapidly during the first two years and that funds for that expansion will be sought by issuing shares to family members and obtaining bank finance.During the first year of trading a net profit before tax of $48000 was made after deducting salaries to the three directors ,of $60000 in toatal.Income tax of 6500 was provided for the year.As well as salaries the three directors declared dividends for themselves of 5c per share.They also decided to transfer $5000 into general reserves.During the second year of trading netprofit before tax was $55000.Family members purchased a further 30000 shares at $ 1.50 per share at the start of the year.Salaries were as in the first year.Interim dividends of 3c per shares were paid.Income tax of $8000 was provide for the year and a further $5000 transfer into general reserves.A final dividend of 5c per share was proposed before the year end.(a)Calculate the retained earnings for year1.(b) Calculate the retained earnings for year2.(c) calculate equity (capital and reserves ) at the end of year1. (d)calculate the equity (capital and reserves) at the year1.