Go-Ahead Limited began the year with common shares of $100,000 and retained earnings of $350,000. During the year, it issued an additional $25,000 of common shares, reported a profit of $75,000, and paid dividends of $5,000.

(a) Calculate the ending balances of

(1) Common shares,

(2) Retained earnings, and

(3) Total shareholders' equity.

(b) Explain how your answer would change if the company had reported a loss of $75,000 rather than a profit.