JCPenney reports merchandise inventory in the Current Assets section of the balance sheet in its 2008 annual

Question:

JCPenney reports merchandise inventory in the Current Assets section of the in its 2008 annual report as follows (amounts in millions of dollars):

Required
1. What method does JCPenney use to report the value of its inventory?
2. What is the amount of the LIFO reserve at the end of each of the two years?
3. Explain the meaning of the increase or decrease in the LIFO reserve during 2008. What does this tell you about inventory costs for the company? Are they rising or falling? Explain youranswer.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...