1. The following information is related to the investment in Spring Pte Ltd and Autumn Pte Ltd.

Spring Pte Ltd – Winter Limited invested in the company on 1 June 2010 and purchased 960,000 ordinary shares. At the date of acquisition, Spring Pte Ltd had 1,200,000 ordinary shares capital and retained earnings of $3,300,000.

Autumn Pte Ltd – the company’s investment by Winter Limited took place on 1 June 2012 when Winter Limited purchased 270,000 ordinary shares. Autumn Pte Ltd had 900,000 ordinary shares capital and $350,000 retained earnings recorded in the account at the acquisition date.

Spring Pte Ltd and Autumn Pte Ltd have not increased their share capital since the investment of Winter Limited. Winter Limited has adopted a partial method to value non-controlling interest.

2. At the acquisition date, Winder Limited determined that all the assets and liabilities of Spring Pte Ltd were measured and recorded at fair value except the land. The land was estimated at $400,000 above the carrying amount recorded in the account of Spring Pte Ltd. The $400,000 has not been recorded in Spring Pte Ltd’s accounts since the Winter Limited acquisition.

3. Winter Limited estimated a $300,000 goodwill impairment in Spring Pte Ltd on 31 May 2021.

4. Winter Limited sold inventories to Spring Pte Ltd for $150,000 during the financial year, and the cost of inventory was estimated at $90,000. 70% of these inventories remained in Spring Pte Ltd’s warehouse as of 31 May 2021.

5. On 31 May 2021, Spring Pte Ltd owed $50,000 to Winter Limited for the inventory transaction. The outstanding amount is included in Winter’s Limited trade receivables and Spring Pte Ltd’s trade payable accounts.

	Winter ($)	Spring ($)	Autumn ($)
Assets
Non-Current Assets
Property, Plant and equipment	6300000	4800000	2300000
Investment in spring pte ltd	5700000	-	-
investment in autumn pte ltd	480000	-	-
total non-current assets	12480000	4800000	2700000
Current Assets
inventories	2160000	1080000	1350000
trade and other receivables	1920000	1320000	1500000
Bank balances and fixed deposits	60000	1200000	300000
Total current assets	4140000	3600000	3150000
Total Assets	16620000	8400000	5850000
Equity and Liabilities
Equity
Ordinary shares	2400000	1200000	900000
Retained earnings	12360000	6300000	4050000
Shareholders' fund	14760000	7500000	4950000
Current liabilities
Trade and other payables	1260000	600000	900000
short-term loan	600000	300000	-
Total current liabilities	1860000	900000	900000
Total equity and liabilities	16620000	8200000	5850000

Required:

a. Prepare a Consolidated Statement of Financial Position for Winter Limited as at 31 May 2021.

b. Discuss under what situations should equity method be used for the consolidated financial statements.