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10. Classification of income statement and retained earnings statement items. For each of the items listed below, indicate how it should be treated in the financial statements. Use the following letter code for your selections: a. Continuing operations b. Discontinued operations c. Prior period adjustment 1. The bad debt rate was increased from 1 % to 2 % , thus increasing bad debt expense. 000.00 2. Obsolete inventory was written off. This was the first loss of this type in the company's history. 3. Loss on sale of investments. The company last sold some of its investments two years ago. 4. Recognition of income earned last year which was inadvertently omitted from last year's income statement. The company sold one of its warehouses at a loss. 5 Settlement of litigation with federal government related to income taxes of three years ago. The company is continually involved in various adjustments with the federal government related to its taxes. 6. Loss on the disposal of a component of a business. 7 baos The company neglected to record its depreciation in the previous year. 8 Discontinuance of all production in the United States. The 9 manufacturing operations were relocated in Mexico. qo bo go becaoiba boon bo bo i050 oluens O2 ( rei