Madigan International is planning a major stock issuance in early 1998. During 1997 the com¬ pany reported net income from operations before taxes of $865,000. The four items below describe major events that occurred during 1997. The company’s accountants chose to include items (1) and (4) in the computation of net income from continuing operations and chose to disclose items (2) and (3) as extraordinary items.