Walgreens Boots Alliance, Inc. and Subsidiaries' (the company created with the combination of Walgreens and Boots Alliance) Form 10-K includes the following in the note that summarizes its accounting policies:

Inventory

The Company's Retail Pharmacy USA segment inventory is accounted for using the last-in-first out (''LIFO'') method. At August 31, 2015 and August 31, 2014, Retail Pharmacy USA segment inventories would have been greater by $2.5 billion and $2.3 billion, respectively, if they had been valued on a lower of first-in-first-out (''FIFO'') cost or market basis.

Required

1. What inventory costing method does Walgreens Boots Alliance use for its Retail Pharmacy USA segment? Explain why you think the company uses this method.

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 2015. What does this tell you about inventory costs for the company? Are they rising or falling? Explain your answer