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Tele Strata Ltd (TSL) is an ASX listed company which provides fibre to the home
broadband connectivity for telecommunication services. The company has always been
successful. TSL has a strong record of rewarding its shareholders. The equity section of
EQUITY $ 000s
Share Capital
Reserves
Share issue costs of $1,800,000 have been offset against the Ordinary share capital.
The Preference shares are non-participating and dividends on those are paid every
1
TSL pays Ordinary share dividends twice a year (ie an interim and final dividend) and also
offers its shareholders regular non-renounceable share rights issues. On the 15th
December 20X5 TSL offered a Dividend Reinvestment Plan for its Ordinary shareholders.
The plan is effective on any Ordinary share dividends paid after the 1st January 20X6 and
50% of ordinary shareholders accepted the offer. Shareholders are issued with fully paid
shares based on the value of the ASX share price on the day of the dividend declaration.
The following are the ASX closing share prices for TSL on the dates provided.
2
STAGE 1 JOURNAL ENTRIES 15 marks
There are two series of transactions detailed below which need attention in addition to the primary
information provided.
1. In the Balance Sheet of TSL at 30/6/X6 there was provision for the payment of a dividend of
8 cents/share on the Ordinary shares. The declaration of dividend date was 30th June 20X6
2. On 21st September 20X6 the Company Board announced an offer to Ordinary shareholders
of a non-renounceable share rights issue of 1 share for every 12 held. The rights shares can
be taken up at 90% of the ASX share price on the day of the announcement of the issue.
The offer closed on 16th October 20X6. 50% of the shareholders took up the offer and
REQUIRED
From the primary information together with the information provided above record the general
journal entries for all transactions for the period 1st July 20X6 to 30th November 20X6.
If necessary round numbers to the nearest whole dollar or the nearest number of whole shares.
In addition to share prices previously supplied you also have the following information.