On January 1, 2017, Primo plc had the following equity accounts.
Share Capital-Ordinary (£10 par value, 75,000 shares issued and outstanding).......£750,000
Share Premium-Ordinary........................................................................200,000
Retained Earnings..................................................................................540,000
During the year, the following transactions occurred.
Jan. 15 Declared a £2 cash dividend per share to shareholders of record on January 31, payable February 15.
Feb. 15 Paid the dividend declared in January.
Apr. 15 Declared a 10% share dividend to shareholders of record on April 30, distributable
May 15. On April 15, the market price of the shares was £15 per share.
May 15 Issued the shares for the share dividend.
July 1 Announced a 2-for-1 share split. The market price per share prior to the announcement was £15. (The new par value is £5.)
Dec. 1 Declared a £0.60 per share cash dividend to shareholders of record on December 15, payable January 10, 2018.
31 Determined that net income for the year was £260,000.
Instructions
(a) Journalize the transactions and the closing entries for net income and dividends.
(b) Enter the beginning balances, and post the entries to the equity accounts.
(c) Prepare an equity section at December 31.