MBALI LIMITED speculates in the ordinary shares of Katlego Limited, a company trading on the JSE Limited. The following information is made available to you:
2012
| 01/03 | Balance: 4,500 shares, purchased as follows: |
| – on 31 October 2011: 3,000 ordinary shares at CU3,40 each; | |
| – on 1 February 2012: 1,500 ordinary shares at CU3,88 each; | |
| The market price per ordinary share at the close of business on 28 February 2012 was CU3,88. | |
| 01/04 | Katlego Limited had a rights issue of 1 right to 1 new ordinary share for every 5 ordinary shares held by shareholders on 25 March 2012. In terms of the rights issue, a new share can be acquired at CU3,30 per ordinary share and these rights to acquire ordinary shares expire on 1 July 2012. On 31 March 2012, the closing price per ordinary share was CU3,90. Rights are not acquired for hedging purposes. |
| 30/04 | Purchased 1 500 ordinary shares for cash at the fair value of CU3,70 each. |
| 01/06 | Sold 800 ordinary shares for cash at the fair value of CU3,90 each. |
| 15/06 | Purchased 200 rights to ordinary shares for cash at the fair value of R0,64 each. |
| 27/06 | Sold 300 rights to ordinary shares for cash at the fair value of R0,66 each. |
| 30/06 | Exercised 700 rights to ordinary shares. |
| 01/08 | Sold 5 500 ordinary shares for cash at the fair value of CU4,00 each. |
| 01/09 | Katlego Limited had a capitalisation issue of 1 ordinary share for every four ordinary shares held by shareholders on 25 August 2012. The fair value of an ordinary shares, immediately prior to the capitalisation issue, was CU4,05. |
Additional information:
| 1. | Brokerage has not been taken into account in the prices paid or received for share and rights transactions. Brokerage is calculated at 0,5% of the total amount paid or received. |
| 2. | Mbali Limited’s reporting date is 28 February 2013 and shares traded at a closing price of CU3,50 per share on that date. |
REQUIRED
Prepare the investment in ordinary shares of Katlego Limited and the rights to ordinary shares of Katlego Limited accounts in the general ledger of Mbali Limited for the year ended 28 February 2013.
| NOTE: | – Round all final amounts calculated to the nearest CU1. |
| – Round cents per share/rights to two decimal places. | |
| – The general ledger accounts must be properly closed off. |
🇿🇦Mbali is popular Zulu name meaning “beautiful flower”.
🇿🇦 Katlego is a popular unisex Setswana name that means “successful”.
