Question 1 Pudding Ltd has two group companies, Cream Ltd and Custard Ltd. The income statements for Pudding Ltd. Cream Ltd and Custard Ltd for the year ended 31 December 2019 are given as follows: Income statements for the year ending 31 December 2019 Sales Cost of sales Gross profit Investment income Management fee income Administrative expenses Distribution costs Interest income Interest expense Profit before tax Tax Profit after tax Pudding Ltd (2,738,250) 675,000 (135,000) Cream Ltd (243,000) (945,000) Custard Ltd (517,500) Pudding Ltd acquired 60% of Cream Ltd on 1 January 2013 for gaining significant influence over Cream Ltd. On this date, the share capital of Cream Ltd was 900,000 and the retained earnings of Cream Ltd was Pudding Ltd acquired 25% of Custard Ltd for on 1 January 2015, gaining partial influence over Custard Ltd. Custard Ltd's share capital and reserves were El on 1 January 2015. The share capital of Custard Ltd is 180,000 50p shares.