On 1 January 2019 Regina Ltd and Twin Ltd, an unrelated company, each subscribed

for half of Sugar Ltd's 100,000 $1 ordinary shares on Sugar Ltd's incorporation. A

contract between Regina Ltd and Twin Ltd gives them equal profit shares and states that

unanimous consent is required for all key operating decisions.

Sugar Ltd made a profit for the six months ended 30 June 2019 of $15,600. In June 2019

Regina Ltd made sales of $5,000 to Sugar Ltd, at a mark-up of 25%. Sugar Ltd still held

all these goods in inventories at 30 June 2019. Regina Ltd recognised its cost of

investment in Sugar Ltd of $50,000 in current assets, but made no further accounting

Related Questions