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Judgment Case 4-7 Income statement presentation L04-3, L04-4, L04-5 The following events occurred during 2021 for various audit clients of your firm. Consider each event to be independent and the effect of each event to be material. 1. A manufacturing company recognized a loss on the sale of investments. Page 229 2. An automobile manufacturer sold all of the assets related to its financing component. The operations of the financing business is considered a component of the entity, 3. A company changed its depreciation method from the double-declining-balance method to the straight-line method. 4. Due to obsolescence, a company engaged in the manufacture of high-technology products incurred a loss on inventory write down. 5. One of your clients discovered that 2020's depreciation expense was overstated. The error occurred because of a miscalculation of depreciation for the office building. 6. A cosmetics company decided to discontinue the manufacture of a line of women's lipstick. Other cosmetic lines will be continued. A loss was incurred on the sale of assets related to the lipstick product line. The operations of the discontinued line is not considered a component of the entity Required: Determine whether each of the above events would be reported as income from continuing operations, income from discontinued operations, or not reported in the current year's income statement

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