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
Words: 1634 - Pages: 7
Harnischfeger 1. In Note 2 of Harnischfeger’s financial statement, the company included net sales of the construction crane products purchased from Kobe Steel, which was previously only reported in the gross margin. Additionally, financial statements of some foreign subsidiaries were included because their fiscal years ended July 31, 1984. An increase in net sales was reported by $5.4 million. Historically, Harnischfeger reported the depreciation at a principally accelerated rate. In 1984, the depreciation
Words: 850 - Pages: 4
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
Words: 1267 - Pages: 6
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 certain foreign subsidiaries’
Words: 812 - Pages: 4
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 Kobe
Words: 1541 - Pages: 7
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
Words: 774 - Pages: 4
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
Words: 328 - Pages: 2
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,
Words: 806 - Pages: 4
the net income by 2.4million in 84. And reduced the net loss by approximately 15.6 million compared with only 6.7 mill in 83 There was a change in the recognition of some types of sales. This resulted in a change in sales calculation. Harnischfeger incorporated products purchased from Kobe Steel, which were re-sold by the company, into its net sales. This increased aggregate sales and cost of sales by $28 million. • There was a change in the fiscal year for some foreign subsidiaries.
Words: 778 - Pages: 4
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
Words: 985 - Pages: 4
