DanceByte Limited is a leading software development company located in Sandton, Johannesburg. The company's current reporting...
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DanceByte Limited is a leading software development company located in Sandton, Johannesburg. The company's current reporting period ends on 31 December 2018. The following are some of the transactions that have been entered into by the newly appointed financial director, on behalf of the company, who has requested your assistance in relation to the appropriate accounting treatment of the transactions. TOKTIK SHARES On 1 January 2018, the group decided to buy some shares in TokTik Limited which is a leading video-sharing social networking service and whose shares were now tradeable. DanceByte purchased 20 000 shares at which date the shares were trading at R55 per share. Based on some research that you have done you advise the group to hold the shares for speculative purposes in order to derive short term profits from the investment. On 1 October 2018 the company purchased an additional 10 000 shares for R65 per share. In order to release some cash for the company, the group decided to sell 1 500 shares on 1 November 2018 for R80 per share. It is the policy of the group to re-measure the shares to fair value before each sale as well as at the end of each financial year (31 December). As at 31 December 2018 the shares were trading at R95 per share. REQUIRED: 3.1 Prepare the general ledger account for the investment in the shares of TokTik Limited for the reporting period ended 31 December 2018 and then answer the following multiple choice questions. (5) DanceByte Limited is a leading software development company located in Sandton, Johannesburg. The company's current reporting period ends on 31 December 2018. The following are some of the transactions that have been entered into by the newly appointed financial director, on behalf of the company, who has requested your assistance in relation to the appropriate accounting treatment of the transactions. TOKTIK SHARES On 1 January 2018, the group decided to buy some shares in TokTik Limited which is a leading video-sharing social networking service and whose shares were now tradeable. DanceByte purchased 20 000 shares at which date the shares were trading at R55 per share. Based on some research that you have done you advise the group to hold the shares for speculative purposes in order to derive short term profits from the investment. On 1 October 2018 the company purchased an additional 10 000 shares for R65 per share. In order to release some cash for the company, the group decided to sell 1 500 shares on 1 November 2018 for R80 per share. It is the policy of the group to re-measure the shares to fair value before each sale as well as at the end of each financial year (31 December). As at 31 December 2018 the shares were trading at R95 per share. REQUIRED: 3.1 Prepare the general ledger account for the investment in the shares of TokTik Limited for the reporting period ended 31 December 2018 and then answer the following multiple choice questions. (5)
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DanceByte Limited Investment in TokTik Limited General Ledger Account Date Description Debit Credit Balance Jan01 Investment in TokTik Limited 20000 s... View the full answer
Related Book For
Financial Accounting For Management
ISBN: 9789385965661
4th Edition
Authors: Neelakantan Ramachandran, Ram Kumar Kakani
Posted Date:
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