The financial statements of Marks and Spencer plc (M&S) are available at the book’s companion website or can be accessed at http://annualreport.marksandspencer.com/_assets/downloads/ Marks-and-Spencer-Annual-report-and-financial-statements-2012.pdf.

Instructions

Refer to M&S’s financial statements and the accompanying notes to answer the following questions.
  (a) How does M&S value its inventories? Which inventory costing method does M&S use as a basis for reporting its inventories?
  (b) How does M&S report its inventories in the statement of financial position? In the notes to its financial statements, what three descriptions are used to classify its inventories?
  (c) What costs does M&S include in Inventory and Cost of Sales?
  (d) What was M&S’s inventory turnover in 2012? What is its gross profit percentage? Evaluate M&S’s inventory turnover and its gross profit percentage.