Argo Software Inc. was incorporated on April 1, 2016. The following transactions occurred during April:
|
Apr. |
1 |
Received a corporate charter authorizing the issue of an unlimited number of voting common shares |
|
1 |
Issued 5,000 common shares for $10,000 cash |
|
|
20 |
Issued 10,000 common shares for land on which a building will be constructed; the market value of the common shares was $3 each on this date |
|
|
25 |
Issued 1,000 common shares for $4 cash each |
|
|
29 |
Reacquired 1,000 common shares for $2,750 to be held as treasury shares |
|
|
30 |
Closed net income of $5,000 from the Income Summary account in the general ledger to the Retained Earnings account |
|
|
30 |
Declared a cash dividend of $.10 per common share, payable as of May 15. |
Required:
- Prepare journal entries to record the April transactions.
- Prepare the statement of changes in equity for the one-month period ended April 30, 2016.
- Assume that on May 25 the common shares were split 2 for 1. How would the share split affect the common shares? Record your answer using the following schedule form.
|
Number of shares outstanding |
Total value of common shares on balance sheet |
Book value per share |
Market price per share |
|
|
Before share split After share split |
$6 |
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