You are given the following simplified statements of financial position of the Fourpine Company as at 31 December.

a How much profit does it at first seem that the company made during year 2?
b How would your answer to (a) be affected if you found out that the company had paid £25,000 in dividends?

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Year 1 Year 2 Non-current assets 520,000 450,000 Current assets 45,000 55,000 Total assets 565,000 505,000 Equity Share capital 300,000 310,000 Retained earnings 35,000 60,000 335,000 370,000 Non-current liabilities 200,000 100,000 Current liabilities 30,000 35,000 Total equity and liabilities 565,000 505,000