Assignment 1 BE2.12 What accounting assumption, principle, or constraint would Marks and Spencer plc (M&S) (GBR) use in each of the situations below? a. M&S records expenses when incurred, rather than when cash is paid. b. M&S was involved in litigation over the last year. This litigation is disclosed in the financial statements. c. M&S allocates the cost of its depreciable assets over the life it expects to receive revenue from these assets. d. M&S records the purchase of a new Lenovo (CHN) PC at its cash equivalent price. P3.3 A review of the ledger of Baylor Company at December 31, 2019, produces the following data pertaining to the preparation of annual adjusting entries. 1. Salaries and Wages Payable S0. There are 8 employees. Salaries and wages are paid every Friday for the current week. Five employees receive $700 each per week, and 3 employees earn $600 each per week. December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December. 2. Unearned Rent Revenue $429,000. The company began subleasing office space in its new building on November 1. Each tenant is required to make a $5,000 security deposit that is not refundable until occupancy is terminated. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease. Date Nov. 1 Dec. 1 Term (in months) 6 6 Monthly Rent $6,000 $8,500 Number of Leases 5 4 3. Prepaid Advertising $13,200. This balance consists of payments on two advertising contracts. The contracts provide for monthly advertising in two trade magazines. The terms of the contracts are as shown below. Contract A650 B974 Date May 1 Oct. 1 Amount $6,000 $7,200 Number of Magazine Issues 12 24 The first advertisement runs in the month in which the contract is signed. 4. Notes Payable $60,000. This balance consists of a note for one year at an annual interest rate of 12%, dated June 1. Instructions Prepare the adjusting entries at December 31, 2019. (Show all computations.)