Case Study: Harnischfeger Corporation

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. • Based on the financial statements in 1984 Harnischfeger made changes from the previous year, the corporation computed depreciation expenses on plants, machinery and equipment using the straight-line method. Prior to

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

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

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

Harnischfeger Corp case study 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

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

Management Course: MBA−10 General Management California College for Health Sciences MBA Program McGraw-Hill/Irwin abc McGraw−Hill Primis ISBN: 0−390−58539−4 Text: Effective Behavior in Organizations, Seventh Edition Cohen Harvard Business Review Finance Articles The Power of Management Capital Feigenbaum−Feigenbaum International Management, Sixth Edition Hodgetts−Luthans−Doh Contemporary Management, Fourth Edition Jones−George Driving Shareholder Value Morin−Jarrell Leadership