The financial statements of M&S are presented in Appendix E. The company’s complete annual report, including the notes to the financial statements, is available online.

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?

c. What costs does M&S include in Inventory and Cost of Sales?

d. What was M&S’s inventory turnover in 2017? What is its gross profit percentage? Evaluate M&S’s inventory turnover and its gross profit percentage.