Mini Case Assignment 3

Mini Case Assignment 3 - CEG GSB 703 Mini Case Assignment...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
CEG GSB 703 Mini Case Assignment #3 Adam Ohanesian Email: Adam.Ohanesian@nichols.edu Table of Contents I. Accounting policy changes and accounting estimates made in 1984 a. Depreciation method b. Estimated depreciation lives c. Rate of return assumption for pension expense d. Liquidation of LIFO e. Provision for doubtful accounts receivables f. Date of financial year ending g. Research and development expense h. Net sales products purchased from Kobe Steel II. Motives of management in making accounting changes a. Stock price b. Earnings targets c. Avoid debt covenant restrictions d. Improve image III. Future prospects and turnaround strategy a. Changes in top management b. Cost reductions c. Reorientation
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
d. Restructuring 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. First, the depreciation method was changed from accelerated to straight line, applied retroactively to all assets. The effect of this change, not including the reduction in the current year’s depreciation expense, increased after tax net income for 1984 by $11.005 million. The company did not report the reduction in the depreciation expense in 1984 due to this change. Second, the company changed its estimated depreciation lives of certain United States plants,
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

Mini Case Assignment 3 - CEG GSB 703 Mini Case Assignment...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online