Bonus Question Walgreen Co.’s 2014 Form 10-K includes the following in the note

Bonus Question
Walgreen Co.’s 2014 Form 10-K includes the following in the note that summarizes its accounting policies:
Inventories
Inventories are valued on a lower of last-in, first-out (LIFO) cost or market basis. At August 31, 2014 and 2013, inventories would have been greater by $2.3 billion and $2.1 billion, respectively, if they had been valued on a lower of first-in, first-out (FIFO) cost or market basis. As a result of declining inventory levels, the fiscal 2014, 2013, and 2012 LIFO provisions were reduced by LIFO liquidations of $187 million, $194 million, and $268 million, respectively. Inventory includes product costs, inbound freight, warehousing costs, and vendor allowances no classified as a reduction of advertising expense.
1. What inventory costing method does Walgreen Co. use? Explain why you think Walgreen Co. 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 2014. What does this tell you about inventory costs for the company? Are they rising or falling? Explain your answer.
From Financial Accounting: The Impact on Decision Makers, 10th ed. G. Porter and C. Norton. Published by Cengage Learning. Page 277.