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
Words: 550 - Pages: 3
Harnischfeger Corporation Introduction Harnischfeger Corporation is a machinery company in Milwaukee, Wisconsin. Harnischfeger was founded in 1884 as a partnership and was incorporated in Wisconsin in 1910 under the name Pawling and Harnischfeger. There were two major segments in this company, Construction Equipment and the Mining and Electrical Equipment divisions and Material Handling Equipment and the Harnischfeger Engineers divisions. Harnischfeger experienced a rapidly growth during
Words: 1475 - Pages: 6
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
This case 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
Words: 965 - Pages: 4
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
Words: 4382 - Pages: 18
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
Case Treppen aus Nord‐ Case ”Treppen aus Nord‐ Nordwegen” g Story Intro • "We must not underestimate the risks of this project. Johannes Stiklestad looked this project " Johannes Stiklestad looked at his in‐law worriedly. Briefly, Per Moen had a slightly annoyed expression, but he controlled himself quickly. He was fully aware that they were talking about a big investment for such a small business, and that the implementation of the project would require great efforts. If it should
Words: 2530 - Pages: 11
in accounting policy and accounting estimates that Harnischfeger made during financial year ending October 31, 1984. Also include in your discussion, what you believe may be real earnings management activities to affect profit. Estimate as accurately as possible, the effect of these changes on the company’s revenue, pre-tax profits and cash flows in 1984. Harnischfeger made the following changes in accounting policy and estimates: Harnischfeger made changes regarding the recognition of some types
Words: 1416 - Pages: 6
analysis of relevant elements in the task environment such as: (1) Competitors (2) Suppliers (3) Regulators (4) Strategic Partners (5) Labor and (6) Customers. 4. Discuss how a development in a corporation’s societal environment can affect the corporation through its task environment. 5. How can managers identify external strategic factors? a. Environmental uncertainty b. Issues priority matrix c. New entrants d. Entry barriers e. Rivalry f. Substitute products g. Bargaining power
Words: 269 - Pages: 2
Unit VIII Article Critique Columbia Southern University DBA 7553 1. Introduction of the Article This article is found in the Directors and Boards magazine. It is written by Donald P. Delves who “is president of the Delves Group, a compensation and corporate governance consulting firm that advises boards of directors” (Delves, 2012). The article is titled “What about everyone else? The problem may not be that executives are paid too much, but that employees are paid too little
Words: 585 - Pages: 3
