Note 2 indicates that, “Inventories valued on the LIFO basis totaled ¥94,578 million and ¥50,037 million at December 31, 2017 and 2018, respectively.” Based on this, the LIFO reserve should most likely:

A . increase.

B . decrease.

C . remain the same.

ZP Corporation is a (hypothetical) multinational corporation headquartered in Japan that trades on numerous stock exchanges. ZP prepares its consolidated fi nancial statements in accordance with US GAAP. Excerpts from ZP’s 2018 annual report are shown in Exhibits 1–3.

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EXHIBIT 1 Consolidated Balance Sheets ( Millions) December 31 Current Assets Cash and cash equivalents Inventories 2017 2018 542,849 608,572 814,760 : 486,465 Total current assets Total assets Total current liabilities 4,028,742 3,766,309 10,819,440 9,687,346 3,980,247 3,529,765 Total long-term liabilities 2,663,795 2,624,002 Minority interest in consolidated subsidiaries 218,889 179,843 Total shareholders' equity 3,956,509 3,353,736 Total liabilities and shareholders' equity 10,819,440 9,687,346