Response to the following problem:
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:
1. Prepare journal entries to record the April transactions.
2. Prepare the statement of changes in equity for the one-month period ended April 30, 2016.
3. Assume that on May 25 the common shares were split 2 for 1. How would the share split affect the common shares?