5 18 The accountant for the Lintz Sales Company is preparing the income statement for 2014 and the balance sheet at December 31, 2014. The January 1, 2014 merchandise inventory balance will appear: as a deduction in the cost of goods sold section of the income statement and as a current asset on the balance sheet. as an addition in the cost of goods sold section of the income statement and as a current asset on the balance sheet. only as an asset on the balance sheet. only in the cost of goods sold section of the income statement.