Grey Limited has been authorized to issue 20,000 100 par value, 10%, noncumulative preference shares and 1,000,000 nopar ordinary shares. The company assigned a 2.50 stated value to the ordinary shares. At December 31, 2020, the ledger contained the following balances pertaining to equity.

Share CapitalPreference	$120,000
Share PremiumPreference	12,000
Share CapitalOrdinary	1,000,000
Share PremiumOrdinary	1,600,000
Treasury SharesOrdinary (1,000 shares)	9,000
Share PremiumTreasury	1,000
Retained Earnings	82,000

The preference shares were issued for land having a fair value of 132,000. All ordinary shares issued were for cash. In November, 1,500 ordinary shares were purchased for the treasury at a per share cost of 9. In December, 500 treasury shares were sold for 11 per share. No dividends were declared in 2020.

Required:

a. Reproduce the Retained Earnings account for 2020 and give your interpretation!

1. Issuance of preference shares for land.

2. Issuance of ordinary shares for cash.

3. Purchase of treasury shares (ordinary) for cash.

4. Sale of treasury shares for cash.

b. Prepare the equity section at December 31, 2020 and analyze the result!