The following events occurred during 2013 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.

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 the write-down of inventory.

5. One of your clients discovered that 2012’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:

Discuss the 2013 financial statement presentation of each of the above events. Do not consider earnings per share disclosures