1. ASSIGNMENT ON ACCOUNTING FOR SUBSIDIARY AND ASSOCIATE

Set out below are the summarized income statements together with Income Surplus Accounts of HH Ltd, BB Ltd, and AA Ltd for the year ended 31 March 2020:

	HH	BB	AA
	GHM	GHM	GHM
Sales	250,800	140,500	55,200
Cost of sales	(141,200)	(86,000)	(32,000)
Gross Profit	109,600	54,500	23,200
Admin and general expenses	(50,200)	(28,000)	(10,500)
Selling and Distribution expenses	(23,000)	(15,400)	(6,700)
	36,400	11,100	6,000
Investment Income	530
Taxation	(11,800)	(3,552)	(1,920)
Net profit after tax	25,130	7,548	4,080

Income surplus account for

The year ended 31 march2020

Balance b/f	103,000	31,000	12,200
Net profit for the year	25,130	7,548	4,080
Proposed ordinary dividend	(5,000)	(600)	(200)
Balance c/d	123,130	37,948	16,080

You are given the following additional information:

1. HH acquired 80% of the ordinary shareholding of BB for 120 million several years ago when BB was incorporated.
2. On 1st April 2019, HH acquired 20% of the equity shares of AA. HH has the power to participate in the financial and operating policy decisions of AA but does not have control over those policies.
3. During the year, BB sold goods worth 10,000 million to HH making 25% profit on cost. 500 million of these goods were in inventory as at 31 March 2020.
4. On 1 April 2019, HH transferred a piece of its equipment with carrying value of 110 million to BB at 100 million. BB has included the equipment in its fixed assets as office equipment. It is the policy of the group to charge depreciation of 20% per annum on straight-line basis. HH has charged the loss on transfer of the equipment to selling and distribution cost.
5. BBs inventory at 31 March 2019 includes 40 million goods it purchased from which HH made profit of 25% on selling price.

HH has taken credit for its share of dividends receivable from BB and AA for the year ended 31 March 2020.

Required:

Prepare the consolidated income statement and income surplus account of HH group for the year ended 31 March 2020.