LIFO is preferred by companies because it results in higher income and lower cost of goods sold. True False Using the lower of cost or net realizable value demonstrates which accounting idea: conservatism fair value principle matching principle historical principle During the month of January, Target purchases 500 cases of paper towels for $35,000; 700 cases at $30,000; and 200 cases at $15,000 What is the cost of goods sold It Target sells 1,200 cases of paper towels for $90,000? Target uses the average cost method a $68,571 b. $80,000 c. $77,143 d. $90,000 Cash flow assumptions do not affect the cost of goods sold and inventory balances. True False A company has inventory costing $505,000. However a fire broke out in the warehouse and $36,000 of the inventory was damaged and cannot be sold. However because the inventory is now in high demand, the company can tell the remaining inventory for $600,000. What should the balance sheet show for this company's inventory account? $600,000 $564,000 $469,000 $505,000