accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements. Prior to 1984‚ the Corporation used principally accelerated methods for its U.S. operating plants. The cumulative effect of this change‚ which was applied retroactively to all assets previously subjected to accelerated depreciation‚ increased net income for 1984 by $11.0 million or $.93 per common and common equivalent share. The changes as defined in Note 2 are as follows: a) Harnischfeger computed depreciation
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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. • Refer to Note 2‚ Harnischfeger included in net sales products purchased from Kobe Steel. Also‚ Financial Statements of certain foreign subsidiaries were included on the basis of their fiscal years ended 31 July 1984. Although it had no significant impact on net income‚ it did increased net sales by $5.4 million. • Also from Note 2‚ Harnischfeger had changed
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Introduction As a result of a worldwide recession in the 1980’s the machinery industry suffered a decrease in demand. This was caused mainly by the cost reduction strategies that most of their major consumers were assuming at the time. Harnischfeger Corporation (HC)‚ one of the oldest manufactures in the machinery industry was among the several companies that had to restructure their strategy in order to survive the economic downturn. After suffering a $77 million loss in 1982‚ HC decided
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1. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements a. Harnischfeger registered as a net sale the final sales amount of products bought from Kobe instead of only the gross margin received per unit. It has also taken in consideration the financial statements of some subsidiaries (but not all of them) to increase net sales. 2. What is the effect of the depreciation accounting method change on the reported income in 1984? How
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1. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements. • Harnischfeger included net sales figure from Kobe Steel Ltd. Previously‚ only net gross margin generated from transactions with Kobe Steel Ltd was included. As a result‚ net sales figure increased by $28 million. • Harnischfeger incorporated certain foreign subsidiaries’ financial statements with fiscal year ending 31st July. The adjustment resulted in a net sales figure increase
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Harnischfeger Corporation* Company Business and Products Harnischfeger Corporation was a machinery company based in Milwaukee‚ Wisconsin. The company had originally been started as a partnership in 1884 and was incorporated in Wisconsin in 1910 under the name Pawling and Harnischfeger. Its name was changed to the present one in 1924. The company went public in 1929 and was listed on the New York Stock Exchange. The company’s two major segments were the P&H Heavy Equipment Group‚ consisting
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Note 2 of its financial statements Harnischfeger Corporation computed depreciation expenses on plants‚ machinery and equipment using the straight-line method for financial reporting purposes. 2. What is the effect of the depreciation accounting method change on the reported income in 1984? How will this change affect profits in future years? The effect of this change was applied retroactively to all assets that were subjected to accelerated depreciation. It increased net income by $11
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HERNISCHFEGER CORPORATION CASE ANALYSIS 1. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements In 1984 they changed the depreciation method from accelerated methods to the straight-line for financial reporting purposes. This change included a adjustment of the residual values on certain machinery and equipment. They also included the products purchased from Kobe Steel‚ LTD and sold by them in their net sales. Moreover‚ they
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1. Identify all the accounting policy 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. Changes that affect the Harnischfeger Revenues: • The company started to account Kobe Steel sales in US‚ previously it only added the gross margin in the financial statement. (this sales represented $28 million) • Sales to a foreign subsidiary started to be consolidated as a net revenues (this
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followed the policy of expensing subscriber acquisition outlays instead of capitalizing them? What would be the effect of expensing subscriber acquisition costs on AOL’s 1995 income statement? Harnischfeger Corp. 1. Identify all the accounting policy changes and accounting estimates that Harnischfeger made during 1984. Estimate‚ as accurately as
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