Question one Tauriel, Gandalf and Bilbo are firms involved in the production and sale of high quality spare parts for vehicles; the following are draft financial statements: Statement of financial position as at 31st December 2021. Assets Tauriel '000 Gandalf '000 Bilbo '000 Non-current assets Property, Plant and Equipment (note 2) 2,250,000 900,000 800,000 Investment in Gandalf (note 3) 600,000 Investment in Bilbo (note 4) Current assets 500,000 Total assets 750,000 300,000 200,000 4,100,000 1,200,000 1,000,000 Equity and liabilities Equity Ordinary share capital (1) Ordinary share capital (0.5) Ordinary share capital (1) Retained earnings Non-current liabilities 200,000 300,000 100,000 3,300,000 660,000 700,000 400,000 Current liabilities Total equity and liabilities 200,000 240,000 200,000 4,100,000 1,200,000 1,000,000 Revenue Cost of sales Gross profit Investment income Administration costs Profit before tax Tax Profit after tax Tauriel Gandalf Bilbo '000 '000 '000 5,736,000 3,140,000 1,500,000 (3,000,000) (2,000,000) (900,000) 2,736,000 1,140,000 600,000 284,000 (200,000) (140,000) (80,000) 2,820,000 1,000,000 520,000 (720,000) (300,000) (160,000) 2,100,000 700,000 360,000