Sunshine Limited has the following equity accounts on January 1, 2022:

Share CapitalOrdinary (4 par, 200,000 shares issued) 800,000 Share PremiumOrdinary 300,000 Retained Earnings 300,000.

In 2022, the company had the following treasury share transactions.

• February: The firm pays a dividend of 1.0 per share. The dividend was announced by

  the board of directors in October of the previous fiscal year.

• April: Issued 20,000 ordinary shares at a price of 20.

• July: The company repurchases 20,000 shares at 15 per share.

• September: Sold 12,000 shares at 18 per share.

• November: Sold 8,000 shares at 7 per share.

  Sunshine uses the cost method of accounting for treasury shares. In 2022, the company reported a net loss of 20,000.

  Instructions

  a. Journalize the treasury share transactions, and prepare the closing entries on December 31, 2022, for net income and dividends.

  b. Open T-accounts for (1) Share Capital Ordinary; (2) Share Premium Ordinary; (3) Treasury Shares; (4) Share PremiumTreasury, (5) Retained Earnings. Post to these accounts (without using a posting reference).

  c. Prepare the equity section for Sunshine Limited at December 31, 2022.