David Company€™s Statements of Income for the year ended December 31, 2008, and December 31, 2007, are presented here:

Additional facts are as follows:
a. On January 1, 2007, David Company changed its inventory method from the average cost method to the first-in, first-out method, and justified the change.
b. The loss from operations of the discontinued Dex Division (a component of the company) from January 1, 2008 to September 30, 2008 (the portion of the year prior to the date of sale) and from January 1, 2007 to December 31, 2007 is included in David Company€™s Statements of Income for the year ended December 31, 2008 and December 31, 2007 respectively, in €œother, net.€
c. David Company has a simple capital structure with only common stock outstanding, and the net income per share of common stock was based on the weighted average number of common shares outstanding during each year.
d. David Company common stock is listed on the New York Stock Exchange and closed at $13 per share on December 31, 2008 and $15 per share on December 31, 2007.
Required
Determine from the additional facts listed whether the presentation of those facts in David Company€™s Statements of Income is appropriate. If the presentation is appropriate, discuss the rationale for the presentation. If the presentation is not appropriate, specify the appropriate presentation and discuss its rationale. Do not discuss disclosure requirements for the Notes to the FinancialStatements.

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Ycar Ended December 31 2008 2007 Net sales Costs and expenses: $00,000 $750,000 $720,000 112,000 $600,000 90,000 9,000 $699,000 51.000 24,000 27,000 Cost of goods sold Selling, general and administrative expenses Other, net 11,000 Total costs and axpenses Income from continuing operations before income taxes Income taxes Income from continuing operations Loss on sale of Dex Division, less applicable $843,000 57.000 23,000 34,000 income axes ot $8,000 8,000 Cumulative effect on pricr years of change in depreciation method, less applicable income taxes of $1,500 3,000 $30,000 26,000 Net income Earnings per s Income before cumulative effect of change hare of common stock in inventory method 2.60 S2.70 Cumulative ettect on pricr ye ars ot change in inventory method, less applicable incomc taxes 30 Net income $ 2.60 $ 3.C0