North Berhad has many investments, but before 2018 none of these investments met the criteria for consolidation as a subsidiary. One of these older investments was a RM2.3 million 11.90% loan to East Berhad which was made in 2017 and is not due to be repaid until 2026. On 1st November 2020, North Berhad purchased 75% of the equity of East Berhad for RM650,000. The consideration was made through 35,000 units equity shares in North Berhad with a fair value of RM650,000. Below are the draft income statements and movement in retained earnings for North Berhad and its subsidiary East Berhad for the year ending 31st December 2020 along with the draft statements of financial position as at 31st December 2020.

Notes (i) North Berhad has not accounted for the issue of its own shares or for the acquisition of the investment in East Berhad. (ii) There has been no impairment in the value of the goodwill. (iii) It is the group policy to value the non-controlling interest at acquisition at its proportionate share of the fair value of the subsidiary's identifiable net assets. Required: Prepare the consolidated balance sheet as at 31 December 2020 and the consolidated income statement for the year ended 31 December 2020 of North Group. Show the detailed computation of the retained profit brought forward. Show all workings. [25 marks]

INCOME STATEMENTS FOR THE YEAR ENDING 31 DECEMBER 2020 North Berhad RM'000 100 (36) 64 276 158 (56) East Berhad RM'000 996 (258) 738 Revenue Cost of sales Gross profit Interest on loan to East Berhad Other investment income Operating expenses Finance costs Profit before tax Income tax expense Profit for the year 442 (112) 330 (330) (276) 132 (36) 96 Opening retained earnings @1.1.2020 Profit for the year Dividends paid Closing retained earnings 235 96 2,640 330 (70) 2,900 331 STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2020 North Berhad RM'000 East Berhad RM'000 100 Assets Non-current assets Property, plant and equipment Investments Loan to East Berhad Other investments 3,000 2,300 600 3,000 800 Current assets Total assets 3,000 139 3,139 3,800 Equity and liabilities Equity Share capital Retained earnings 700 2,900 3,600 185 331 516 Non-current liabilities Loan from North Berhad Current liabilities Total equity and liabilities 200 3,800 2,300 323 3,139