ACC 613
Chapter 3: Harnischfeger Case
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 made the following accounting policy changes and accounting estimates during the year 1984.
' There was a change in the recognition of some types of sales. This resulted in a change in sales calculation. Harnischfeger incorporated products purchased from Kobe Steel, which were re-sold by the company, into its net sales. This increased aggregate sales and cost of sales by $28 million.
' There was a change in the fiscal year for some foreign subsidiaries.
' There was a change in the depreciation methods on assets. The depreciation policy for financial reporting purposes was changed to a straight-line method from a principally accelerated method.
' There was a change in the use of last-in, first-out (LIFO) liquidation......
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Approximate Word Count: 276
Approximate Pages: 2 (260 words per double-spaced page) |