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1. What accounting assumption, principle, or modifying convention does Target Corporation use in each of the situations below?
(a) Target uses the lower of cost or market basis to value inventories.
(b) Target was involved in litigation over the last year. This litigation is disclosed in the financial statements.
(c) Target allocates the cost of its depreciable assets over the life it expects to receive revenue from these assets.
(d) Target records the purchase of a new IBM PC at its cash equivalent price.
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