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
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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
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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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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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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 construction
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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 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
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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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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 made in, first of all, management, and, of course
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