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) What were M&S’s total assets on 28 March 2015? On 29 March 2014?

(b) How much cash (and cash equivalents) did M&S have on 28 March 2015?

(c) What were M&S’s selling and marketing expenses in 2015? In 2014?

(d) What were M&S’s revenues in 2015? In 2014?

(e) Using M&S’s financial statements and related notes, identify items that may result in adjusting entries for prepayments and accruals.

(f) What were the amounts of M&S’s depreciation and amortization expense in 2014 and 2015?

Total assets refer to the all resources owned by the business. It includes current assets such as inventory, accounts receivables, cash and cash equivalent, etc., and fixed assets such as Property, plant, and equipment.

Cash and cash equivalents are reported as current assets on the balance sheet. It includes the cash balance held by the company and other assets which are treated as equivalent to cash such as commercial paper.

Selling and marketing expense indicates the expenses related to selling and promotion of merchandise.

Selling and marketing expense includes retail staffing, retail occupancy, distribution, marketing and related, and support. It has increased by £1.5 million as compared to 2014.

Revenues are the income generated by way of selling merchandise to the customers. Revenues include the revenue from multiple sources like general merchandise, food, UK revenue, Franchised revenue, own revenue, and international revenue.

Adjusting entries are used to record the revenues and expenses which has been earned or accrued. In the case of Mark and Spencer Company, they will record adjusting entries for depreciation expense on the fixed assets, interest payable on the obligations, and also the interest income earned in the financial period.

Depreciation and amortization are non-cash expenses recorded to absorb the cost incurred on purchasing fixed assets over the useful life of the asset. Depreciation and amortization have increased in the year 2015, due to more investment in new stores and other expansions.