Plover Limited had the following equity accounts on January 1, 2017: Share Capital-Ordinary (£1 par) £400,000, Share Premium-Ordinary £500,000, and Retained Earnings £100,000. In 2017, the company had the following treasury share transactions.

Mar. 1 Purchased 5,000 shares at £7 per share.

June 1 Sold 800 shares at £10 per share.

Sept. 1 Sold 1,700 shares at £9 per share.

Dec. 1 Sold 1,000 shares at £5 per share.

Plover uses the cost method of accounting for treasury shares. In 2017, the company reported net income of £80,000.

Instructions

(a) Journalize the treasury share transactions, and prepare the closing entry at December 31, 2017, for net income.

(b) Open accounts for (1) Share Premium-Treasury, (2) Treasury Shares, and (3) Retained Earnings. Post to these accounts using J12 as the posting reference.

(c) Prepare the equity section for Plover Limited at December 31, 2017.