E4-28B. (Learning Objective 4: Reporting expenses function and nature) Maryland’s accountant has just prepared an analysis of its expenses for the year, by nature and by functions.

The company earned service revenue totaling €450,000 during the year.

1. Prepare Maryland’s Income Statement using analysis of expenses by nature.
2. Prepare Maryland’s Income Statement using analysis of expenses by function.
3. Looking at your answers to parts 1 and 2 above, which one do you prefer as a user of financial statements?

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A1 1 Expense by Nature and Function 2 Wages and Salaries 3 Depreciation 4 Advertising expense 5 Motor vehicle expense 6 Utilities expense 7 Interest expense 8 Tax expense 9 10 Cost of Sales and Distribution Sales Marketing and Logistics 32,000 Administrative Expenses Unallocated 36,000 29,000 16,000 4,200 3,800 7,000 2,000 27,000 21,000 32,000 23,000 12,000 5,000 11,000 3,000 8,700 4,300