References: Edmonds‚ T.‚ Olds‚ P.‚ McNair‚ F.‚ & Tsay‚ B. (2010). Survey of Accounting (2nd ed.). New York: McGraw-Hill Irwin
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CHAPTER 1 INTRODUCTION THE PROBLEM AND ITS SCOPE Rationale Zipkin (2000)‚ states that every one of us deals with dozens of inventories daily without thinking too hard about them. At home‚ we stock supplies of foods‚ drinks‚ soap‚ and many other items‚ because they make life easier than it would be otherwise. During times of calamities when there is no electricity and gas for cooking‚ one’s stock of canned goods and other ready to eat foods are of great help. Olivario (1998) said that
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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 the accounting changes in 1984‚ the company had experienced some financial losses was able to recover. There has been a change in depreciation accounting when it comes to
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28. Sales during the first quarter were 1‚400 units at $75 per unit. The White Company uses a periodic inventory system. Using the White Company data‚ fill in the following chart to compare the results obtained under the FIFO‚ LIFO‚ and weighted-average inventory methods. FIFO LIFO Weighted Average Goods Available for Sale $82‚800 $82‚800 $82‚800 Ending Inventory‚ March 31 20‚000 16‚400 18‚400 Cost of Goods Sold 62‚800 66‚400 64‚400 3. Perpetual inventory system: journal entries. At the beginning
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Read the “Harnischfeger Corp” case study and answer the following questions. Submit your completed assignment no later than the last day of Week 2. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements. They included products purchased from Kobe Steel in their net sales causing them to increase by $5.4 million. They changed the way they compute depreciation expense by using the straight-line method‚ resulting in an increase in net income
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their jobs. One of the methods used by management to achieve desired income is to manipulate the LIFO inventory method. This method allows management to dip into the LIFO “reserves” and to make carefully timed year-end purchases. Efforts to change accounting standards to those that are closer to reality have been rejected as being unauditable or too volatile. A second beneficiary of these loose accounting standards is the shareholders. Misrepresented financial statements generally make earnings appear
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$79.60 (20 units @ $3.98). (Weighted average cost = $438/110 units = $3.98) b) FIFO‚ $99.00 (19 units @ $5.00 + 1 unit @ $4.00). c) Only the FIFO method results in the same ending inventory valuation in both periodic and perpetual costing environments. Under the weighted average cost method‚ periodic and perpetual systems usually result in different valuations due to the timing of inventory purchases and sales. Under FIFO‚ the value assigned to ending inventory is the same using periodic or perpetual
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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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many different products or services‚ such as in furniture manufacturing‚ hospitals‚ and legal firms. Process costing is used where units of product are homogeneous‚ such as in flour milling or cement production. The purpose of a job order cost accounting system is to assign and accumulate costs for each job‚ i.e.‚ an order‚ a contract‚ a unit of production‚ or a batch. Job order costing should be used if the production or service is being performed to meet customer specifications or requirements
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1. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements. In 1984‚ the Corporation has computed depreciation expense on plants‚ machinery and equipment using the straight-line method for financial reporting purposes. Prior to 1984‚ the Corporation used principally accelerated methods for its U.S. operating plants. 2. What is the effect of the depreciation accounting method change on the reported income in 1984? How will this change
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