Merchandise Inventories and Cost of SalesMerchandise inventories are valued by t

Merchandise Inventories and Cost of SalesMerchandise inventories are valued by the retail method and are stated at the lower of cost (lastin first-out ?oLIFO??) or market and include freight buying and distribution costs. The Company takes markdowns related to slow moving inventory ensuring the appropriate inventory valuation. At January 31 2004 and February 1 2003 the LIFO value of inventories exceeded market value and as a result inventory was stated at the lower market amount.Consignment merchandise on hand of $127861 and $112435 at January 31 2004 andFebruary 1 2003 respectively is not reflected in the consolidated balance sheets.a. Why were inventories recorded at market value?b. What are consignment inventories and why were they excluded from the balance sheet valuation?