Target Case

LO$2$O$-2,$ LO$20-4$

Target Corporation prepares its financial statements according to U$.$S$.$ GAAP. Target's financial statements and disclosure notes for the year ended January $30,2016,$ are available in Connect. This material is also available under the Investor Relations link at the company's website $($

www$.$target.com$).$ Target's share$-$based compensation includes several long$-$term incentive plans.

Required:

Refer to Target's financial statements for the year ended January $30,2016.$ Note $12$ provides information on Target's inventories. What method does Target use to report most of its inventories? If Target changed that method to another method, what are the steps Target would take to account for and report the change?

Suppose that Target uses FIFO costing method but decided to change to the LIFO method. What are the steps Target would take to account for and report the change?