QUESTION SIX (20 Marks)

Using the information provided below, you are required to prepare the income statement for DP World Investment Group plc for the year ending 31 December 2022.

a) Classifying expenses by nature; (10 Marks)

b) Classifying expenses by function. (10 Marks)

Sales revenue has been ascertained to be TZS 192,670,000

Inventory balances were as follow:

Raw materials Work in Progress Finished goods

31 December 2022 TZS 600,000 TZS 1,140,000 TZS 13,500,000

31 December 2021 TZS 900,000 TZS 740,000 TZS 5,800,000

Raw materials purchased during the period amounted to TZS 20,500,000

Employee benefits expense has been analysed as follows:

TZS

Production staff 15,900,000

Administration 45,000,000

Sales 6,500,000

Distribution 4,000,000

The following analysis of depreciation and amortization expense has been carried out as follows:

TZS

Production 3,600,000

Administration 4,000,000

Sales 1,250,000

Distribution 2,200,000

The company incurred debenture interest expense amounting to TZS 5,600,000

The remaining expenses incurred have been analysed as follows:

TZS

Production 4,500,000

Administration 19,000,000

Sales 1,000,000

Distribution 7,500,000

The company defines "cost of sales" as production cost of goods plus selling costs.

Deferred tax expense has been calculated as TZS 1,500,000 and current tax expense as TZS 8,100,000.