Case Study 3 Harnischfeger

Case 3: Harnischfeger Despite the continued depressed study and intense price competition in the world markets it serves, the confederacy managed to earn profit for the fiscal year 1984 amounted to USD 15.2 million. This was mainly payable to several changes in Companys accounting constitution and estimates during the year which resulted in positive incumbrance to the meshing income. In November 1983, the Company changed its depreciation method for fixed assets from intensify methods to bang-up line method for financial reporting purposes. The cumulative solution of this change, which was applied retroactively to all assets previously subject to accelerated depreciation, increased net income of 1984 by $ 11 million. As the lives of accredited US plants, machinery and equipment and residual value on certain machinery and equipment were changed too, the net income effect for 1984 was $ 3.65 million. The Corporation values its inventories at demoralise of constitute or market, the cost is determined by LIFO method. In a period of rising purchase costs, it produces a high cost of goods sold expense and a lower stock-take asset value compared with other method. Hence, it will produce lower profit and lower income tax.

Since 1983, the Corporation started to liquidate its excess inventories, with effect to the net income of 1984 amounting to USD 2.4 million. Effective November 1983, the Corporation includes its net sales agreements products purchased from Kobe sword and sold by the Corporation, while previously only the utter(a) margin on Kobe-originated equipment was included. In addition, the financial statements of certain international subsidiaries are included which increases net income by USD 19.6 million and USD 3.8 million, respectively. In October 1983, the Corporation entered into a ten year agreement with Kobe down the stairs which Kobe agreed to supply the Corporations requirements for construction cranes for sale in the US and to make the Corporation the exclusive distributor of Kobe built cranes in the US.... If you want to get a all-encompassing essay, order it on our website: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper