The equity accounts of Karp Outfitters at January 1, 2020, are as follows.

Share Capital—Preference, 6%, £50 par .................£600,000
Share Capital—Ordinary, £5 par ................................800,000
Share Premium—Preference .....................................200,000
Share Premium—Ordinary .........................................300,000
Retained Earnings ........................................................800,000

There were no dividends in arrears on preference shares. During 2020, the company had the following transactions and events.
July     1     Declared a £0.60 cash dividend per share on ordinary shares.
Aug.   1     Discovered £25,000 understatement of depreciation expense in 2019. (Ignore income taxes.)
Sept.  1     Paid the cash dividend declared on July 1.
Dec.   1     Declared a 15% share dividend on ordinary shares when the market price of the shares was £18 per share.
         15     Declared a 6% cash dividend on preference shares payable January 15, 2021.
          31    Determined that net income for the year was £355,000.
          31    Established a £200,000 restriction of retained earnings for plant expansion.

Instructions
a. Journalize the transactions, events, and closing entries for net income and dividends.
b. Enter the beginning balances in the accounts, and post to the equity accounts.
c. Prepare a retained earnings statement for the year.
d. Prepare an equity section at December 31, 2020.