The Spring Group carries on business as a distributor of building materials into the country. Spring was incorporated in 2011 to distribute building materials. It diversified its activities during 2014 to include the import and distribution of water meter, and expanded its operations by the acquisition of shares in Summer in 2016 and in Autumn in 2018. Accounts for all companies are made up to 31 December.

The draft income statements for Spring, Summer, Autumn and Winter for the year ended 31 December 2021 are as follows.

	Spring		Summer		Autumm		Winter
	RM'000		RM'000		RM'000		RM'000
Revenue	45,600		24,700		22,800		610
Cost of Sales	-18,050		-5,463		-5,320		-310
	--------------------------		--------------------------		--------------------------		--------------------------
Gross profit	27,550		19,237		17,480		300
Distribution costs	-3,325		-2,137		-1,900		-70
Administrative expenses	-3,475		-950		-1,900		-10
Finance costs	-325		-		-		-
	--------------------------		--------------------------		--------------------------		--------------------------
Profit before tax	20,425		16,150		13,680		220
Income tax expense	-8,300		-5,390		-4,241		-120
	--------------------------		--------------------------		--------------------------		--------------------------
Profit for the year	12,125		10,760		9,349		100
	--------------------------		--------------------------		--------------------------		--------------------------

The draft statements of financial position as at 31 December 2021 are as follows.

	Spring		Summer		Autumm		Winter
	RM'000		RM'000		RM'000		RM'000
Non-current assets
Property, plant and equipment (NBV)	35,483		24,273		13,063		270
Shares in Summer	6,650		-		-		-
Shares in Autumn	-		3,800		-		-
Current assets	1,568		9,025		8,883		200
	--------------------------		--------------------------		--------------------------		--------------------------
Total assets	43,701		37,098		21,946		470
	--------------------------		--------------------------		--------------------------		--------------------------
Equity
RM1 ordinary shares	8,000		3,000		2,000		100
Retained earnings	22,638		24,075		19,898		300
Current liabilities	13,063		10,023		48		70
	--------------------------		--------------------------		--------------------------		--------------------------
Total Equity and Liabilities	43,701		37,098		21,946		470
	--------------------------		--------------------------		--------------------------		--------------------------

The following information is available relating to Spring, Summer, Autumn and Winter.

i. On 1 January 2016 Spring signed the purchase agreement to acquire 2,700,000 of ordinary shares in Summer at cost of RM2.7 million for RM6,650,000 at which date there was a credit balance on the retained earnings of Summer of …6/- 6 BAC305/03 RM1,425,000. No shares have been issued by Summer since Spring acquired its interest.

ii. On 1 January 2018 Summer acquired 1,600,000 of ordinary shares in Autumn at cost of RM1.6 million for RM3,800,000 at which date there was a credit balance on the retained earnings of Autumn of RM950,000. No shares have been issued by Autumn since Summer acquired its interest.

iii. On 1 January 2021, Spring acquired 40,000 shares in Winter by way of a share exchange of two shares in Spring for each acquired share in Winter. The share market value of Spring’s shares at the date of this share exchange was RM2.50. Spring has not yet recorded the acquisition of the investment in Winter.

iv. During 2021, Autumn had made intragroup sales to Summer of RM480,000 making a profit of 25% on cost and RM75,000 of these goods were in inventories at 31 December 2021.

v. During 2021, Summer had made intragroup sales to Spring of RM260,000 making a profit of 20% on cost and RM90,000 of these goods were in inventories at 31 December 2021.

vi. On 1 November 2021 Spring sold warehouse equipment to Summer for RM240,000 from inventories. Summer has included this equipment in its property, plant and equipment. The equipment had been purchased on credit by Spring for RM200,000 in October 2021 and this amount is included in its current liabilities as at 31 December 2021.

vii. Summer charges depreciation on its warehouse equipment at 20% on cost. It is company policy to charge a full year's depreciation in the year of acquisition to be included in the cost of sales.

viii. An impairment test conducted at the year-end did not reveal any impairment losses. ix. It is the group's policy to value the non-controlling interest at fair value at the date of acquisition. The fair value of the non-controlling interests in Summer on 1 January 2016 was RM500,000. The fair value of the 28% non-controlling interest in Autumn on 1 January 2018 was RM900,000.

Required:

a. Prepare the statement of comprehensive income for the Spring Group for the year-ending 31 December 2021. (18 marks)

b. Prepare the statement of financial position for the Spring Group for the year ending 31 December 2021. (22 marks)