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Teddy Ltd. owns all the share capital of Millie Ltd. The income tax rate is 30%. Required: Prepare all the relevant journal entries required for
Teddy Ltd. owns all the share capital of Millie Ltd. The income tax rate is 30%. Required: Prepare all the relevant journal entries required for the consolidation worksheet on 30 June 2023 for the following independent transactions. a) On 1 September 2022, Millie Ltd. borrowed $80,000 from Teddy Ltd. at an annual interest rate of 5.4%. The loan term was for 5 years, and it was an interest-only loan with interest payable by 31 July every year. (1 mark) b) Millie Ltd. sold inventory costing $28,000 to Teddy Ltd. Millie Ltd. recorded an $8,000 profit before tax on these transactions. All these transactions occurred during the financial year 2022-23. On 30 June 2023, Teddy Ltd. sold 90% of the inventory to external parties, and the receivable was still outstanding. (2 marks)
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