Harnischfeger Corporation Harnischfeger Corporation was a machinery based company based in Milwaukee, Wisconsin. The company had initially started as a partnership; however, in 1910 it was incorporated in Wisconsin under the name of Pawling and Harnischfeger. The company finally went public in 1929 and was listed in the New York Stock Exchange under the new name Harnischfeger. The company had two major segments of business P&H Heavy Equipment Group, which consisted of the construction equipment
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Management Harnischfeger Corporation Questions 1. Identify all the accounting policy changes and the accounting estimates that Harnischfeger made during 1984. Estimate, as accurately as possible, the effect of these on the company´s 1984 reported profits. 2. What do you think are the motives of Harnischfeger´s management in making the changes in its financial reporting policies? Do you think investors will see through these changes? Answers 1. Identify all the accounting policy changes
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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. In early 1980s Harnischfeger Corporation, a machinery company based in Milwaukee, Wisconsin, faced a severe financial crisis. The company’s poor performance continued through 1983, however, the company reported net profit in 1984. This positive result was a consequence of a number of changes that have been
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Week 3 case study: 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. * Harnischfeger retroactively changed its depreciation method from accelerated to straight-line for all depreciable assets. The cumulative effect of this accounting policy change, which not including the reduction in the current year’s depreciation
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Harnischfeger Corporation * * | * | * 945 | * | | * Harnischfeger Corporation Teaching Note INTRODUCTION The purpose of the "Harnischfeger Corporation" case is to expose students to the managerial motives for making major financial reporting policy changes. Generally accepted accounting principles (GAAP) allow companies wide latitude in the choice of accounting policies. After a firm chooses a set of accounting policies
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Directions Read the “Harnischfeger Corp” case study and answer the following questions. Submit your completed assignment no later than the last day of Week 2. 1. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements. After reviewing the accounting policies of other corporations in similar industries, Harnischfeger decided to adjust their depreciation method. Instead of continuing to use the accelerated method for depreciating their US
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Harnischfeger Corporation Teaching Note INTRODUCTION The purpose of the "Harnischfeger Corporation" case is to expose students to the managerial motives for making major financial reporting policy changes. Generally accepted accounting principles (GAAP) allow companies wide latitude in the choice of accounting policies. After a firm chooses a set of accounting policies, current accounting rules permit changes from one alternative policy to another at the discretion of the management
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Harnischfeger Corporation, a large New York Stock Exchange company, faced a financial crisis in 1982. New management was appointed to turn the company around and as part of its restructuring strategy, the new management team made a number of financial reporting policy changes and accounting estimates in fiscal year 1984. Listed below are all of the changes and analysis on whether they might be real earnings management activities. In addition, the effect of these changes on the company’s revenue,
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all the accounting policy changes and the accounting estimates that Harnischfeger made during 1984. Estimate, as accurately as possible, the effect of these on the company’s 1984 reported profits. a. Changes that affect the Harnischfeger Revenues: • The company start to account Kobe Steel sales in US, previously it only add the gross margin in the financial statement. (this sales represents $28 millions) Following are the accounting policy changes and accounting estimates that Harnischfeger made
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Harnischfeger 1. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements In 1984 they changed the depreciation method they were using to expense their plants, machinery and equipment to the straight-line method for financial reporting purposes. This change included a adjustment of the residual values on certain machinery and equipment. They also included the products purchased from Kobe Steel, LTD and sold by them in their net sales
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