ACC 725 Harnischfeger Corporation Case Kai Chen 1. Prepare a brief description of the company and its environment. Harnischfeger Corporation was a machinery company based in Milwaukee. Harnischfeger was a leading producer of construction, mining and electrical equipments, export and foreign sales constituted more than 50% of the total revenues of the company. In 1980s, the company suffered a financial crisis due to the worldwide recession. Harnischfeger Corporation took some
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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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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, 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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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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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
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Case Write Up Harnischfeger Corporation Questions 1. Identify the accounting policy changes and accounting estimates that Harnischfeger made during 1984. Estimate the effect of these changes on the company's 1984 reported profits. Changes made and the effects of these changes: · In the financial notes, note 2, in 1984 the corporation calculated depreciation using the straight line method. In previous years they were using an accelerated methods of depreciating. By changing this method
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Case Study: | Harnischfeger Corporation | | | Q1: Changes in accounting policy and accounting estimates. (i) Inclusion of full sales price of construction and mining equipment purchased from Kobe Steel, Ltd. (later resold by the Corporation) in net sales If the Corporation continued with the prior recognition, which was to recognize gross margin, a loss of $5.7 million would be reflected in net sales. However, under the new recognition method no loss would be recorded, instead, revenue
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9-798-062 REV: FEBRUARY 25, 2006 PANKAJ GHEMAWAT JAN W. RIVKIN Creating Competitive Advantage Some companies generate far greater profits than others. The pharmaceutical maker ScheringPlough produced an economic profit of more than $10 billion during the period 1984-2002. That is, the accounting profit it generated exceeded its cost of equity capital by that amount. Over the same period, U.S. Steel produced an economic loss of nearly $500 million; its cost of capital exceeded its accounting
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German Accounting Introduction We are on the precipice of a fundamental globalisation step. The important and continued globalisation of investment has led to the development of internationally applicable standards and codes of practice. The international demand for standardised regulatory systems and processes has many benefits; however countries have been largely unwilling to adopt the international standards and codes for various reasons. (Mansfield, 2004) This report will focus on Germany
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