Harnischfeger Corp. Case Harnischfeger Corp. is a large New York Stock Exchange company but with old-line, low-tech. This family-based old midwest company had a history for almost 100 years. When the recession hit the financial world during 1980-1981, Harnischfeger could hardly maintain its solid financial performance. Finally, it violated the bond covenants that significantly cause financial distress. In the year of 1984, a number of accounting policy changes were made by the new manager, Peter
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Overview For this assignment, purchase and read the case file “Harnischfeger Corp.” You can purchase the reading from Harvard Business Publishing Web site. After reading the case, answer the questions on page three of this document. Submit your assignment by the end of Week 2. Rubric Use this rubric to guide your work. |Tasks |Accomplished |Proficient |Needs Improvement |Not Acceptable | |Assignment |Insightful
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CHAPTER 3 OVERVIEW OF ACCOUNTING ANALYSIS HARNISCHFEGER CORPORATION 1 Identify all the accounting policy changes and accounting estimates that Harnischfeger made during 1984. Estimate, as accurately as possible, the effect of these on the company’s 1984 reported profits. i. Harnischfeger Corporation had changed from accelerated to straight-line method for computing depreciation expenses on plants, machinery and equipment in 1984.The cumulative effect is that net income for 1984 increased by $11
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is talking about Harnischfeger Corporation, leading producer of Construction Equipment, Mining and Electrical Equipment, Material Handling Equipment and Harnischfeger Engineer, based in Milwaukee, Wisconsin. The main topic of this case is the accounting policy changes after financial difficulties and its effect on financial reporting and the motive of these changes. Questions 1. Identify all accounting policy changes and accounting estimates that Harnischfeger made during 1984. Estimate, as accurately
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1. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements. Note 2 (pg. 17) states that in 1984 Harnischfeger changed their depreciation method that was being used to expense their plants, machinery and equipment from the direct method to the straight-line method for financial reporting purposes. An adjustment of the residual values on certain machinery and equipment was made. Harnischfeger also included the products purchased from
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all the accounting policy changes and accounting estimates that Harnischfeger made during 1984. Estimate, as accurate as possible, the effect of these on the company’s 1984 reported profits. Accounting policy changes made on core business activities: • Harnischfeger included net sales figure from Kobe Steel Ltd. Previously, only net gross margin generated from transactions with Kobe Steel Ltd was included. This change resulted in a net sales figure increase of $28 million. • Harnischfeger incorporated
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Week 4: Harnischfeger Inc. 1. Describe clearly all of the accounting changes Harnischfeger made in 1984. 1. There is a change in the depreciation method. They change from accelerated depreciation to straight line method. Because they change for the accelerated depreciation to straight line depreciation the will record lower cost. This will lower the total cost en thereby increase the net profit. 2. The estimated depreciation lives of the assets in U.S. are revalued. In the notes they say that
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613 Chapter 3: Harnischfeger Case 1. Identify all the accounting policy changes and accounting estimates that Harnischfeger made during 1984. Estimate, as accurately as possible, the effect of these on the company's 1984 reported profits. Harnischfeger made the following accounting policy changes and accounting estimates during the year 1984. • There was a change in the recognition of some types of sales. This resulted in a change in sales calculation. Harnischfeger incorporated products
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Accounting policy changes: Kobe steels impact on the accounting changes: -Owned 8.4% of the Corporations outstanding common stocks. -Owns 25% of the capital stock of Harnishfeger of Australia Pty. (the owner ship appers as the minority interest in the balance sheet.) -Net fee income received from Kobe was 4.3min in 84, an increase of 1.2 mill from previous year. -ten year agreement with Kobe supplying the corporation requirement for construction cranes for sale in US. -Join R&D program for
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Jennifer Diaz ACG6175 Harnischfeger Corp: Case Study 2 1. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements. As stated in Note 2 of its financial statements, the accounting changes Harnischfeger made in 1984 are those of net sales of the products that were purchased from Kobe Steel which were then sold by Harnischfeger which added on to the net sales of the company. Harnischfeger included financial statements of certain
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