Report on Multi User Operating Systems Essay Example for Free

Report on Multi User Operating Systems Essay Resources Sharing Concepts of Resource Sharing A multi user operating system can support more that one user at a time, this means that multiple users can share the same system resources simultaneously. The users of a multi user operating system can share both hardware and software resources, the operating system carries out complicated routines to manage all the processes that the users are running. List of shared resources: * Hardware CPU Power, RAM, Hard drive, Peripherals (printer, Scanner, CD ROM) Other peripherals may be made available in a MUOS for users who require them (Floppy disk drive, Speakers, Head Phones, Video Cameras etc. ) * Software Scheduler Software (needed to manage and prioritise tasks). Batch Job Some processes take a long time to complete and can often disturb other computer tasks that are important. A Batch Job is a file that does not require any user interaction, so it is set up to run a number of processes at a later time, often late at night. One example is overnight maintenance at a bank when they update all the accounts so it will not disrupt the other processes during the day. Multi-Tasking Concepts of multi-tasking Multi tasking is when the operating system switches between tasks at a very high speed, it can sometimes seem as though it is performing more than one task at a time. For example, a user could be printing and typing at the same time, and listening to a CD. Many users can access the same resources at (what appears to be) the same time. One disadvantage of this is that it requires a great deal of memory and the processes may run slower. The two types of multi-tasking are co-operative and pre-emptive: * Pre-emptive This is when the applications are forced to give up the CPU after a certain length of time so that the other processes get an equal share of CPU time. (time-sliced). * Co-operative multi-tasking is when it is the current running tasks responsibility to share the CPU to the other processes. One task must finish before the other starts. It is called Co-operative because all the tasks must co-operate for this type of processing to work and there is no time limit on each task. (Round Robin). Advantages / Disadvantages An advantage of Pre-emptive multi-tasking is that some important tasks may be allocated a more time slices so it will not be stalled by other smaller tasks. A disadvantage of both types of multi-tasking is that it requires a large amount of memory to work properly. Background Processing Concepts of background / foreground processing When a task will require a long time to process and requires no user input e.g. downloading a large file from the internet, it can be processed later when the computer is not processing other tasks. Background processing is often used in banks and businesses to process the customers accounts at the end of each day, the operating system can be left to run the process overnight or when the CPU is not currently being used by a task that requires a great deal of processing. Unix command to run background processing Control-Z = Leave process running in background bg = Continue process at background Control-C = move foreground process to background Fg = move the process to foreground Example of a background process If you need to run a large print job, e.g. printing out one hundred copies of a Workbook for a group of students, it can be set as a background process and will only use CPU power when other tasks are not running. Types of Multi-User Operating System Multi-Processor More than one CPU Multi user operating systems can sometimes have more that one processor. In some expensive operating systems it is possible to connect more CPUs to the system and have them work together to execute tasks. Multiprocessing can significantly reduce the time taken to execute each process. An operating system with multiple processors can perform different tasks separately or a task can be split up and processed by different CPUs. Advantages / Disadvantages An advantage is that multi processing systems can be very speedy at completing tasks. A disadvantage is that this type of system is very expensive. Time-Sliced As multi user operating systems share resources, different processes can require different amounts of time. It is possible and to interrupt a large process so that a smaller process to be completed. If you were using a time slicing system then the processor will switch between processes at timed intervals (Pre-emptive). The amount of time allocated to each process is called a time slice. The length of time given for each time-slice is allocated by a program called a scheduler. An advantage is that larger or more important processes may be given more time slices than a smaller task so it can be completed, however this could also be a disadvantage if there are many users executing smaller tasks as they will take longer to be finished. Distributed The distributed system is where a number of systems are connected through a Local Area Network. This can be more powerful than a single processor system and it is capable of online sharing. Hardware Components Processor The CPU is the brain of the operating system. It responds to and processes and instructions that control the computer. The control unit in a CPU controls everything which happens within, the ALU does calculations and is responsible for decision making and the accumulator stores the last data that was decoded for future processes. There are various registers within the CPU, they are the instruction register, which holds the instruction that is being decoded, the program counter stores what part of the program we have reached, the memory address register points to the location where data is being fetched or written and the memory data register is a storage area for data that is currently being transferred between the memory and the CPU. The Fetch-Decode-Execute Cycle has three important stages. * FETCH The CPU collects an instruction from the RAM * DECODE The control unit figures out what to do with it. * EXECUTE The instruction is carried out The speed of an FDE cycle depends on how fast the processor is (the length of time it takes for the signals to be sent to the control bus, and how many T-cycles each assembly instruction takes to execute. Memory Random Access Memory is sometimes known as main memory. RAM is volatile, which means it loses all the stored information when the power is cut off. Some computers also use virtual memory, which is stored in the hard drive but acts like RAM, this is much slower than physical memory. Another type of memory is Read Only Memory (ROM) which can be written to but cannot be erased. Data Storage Devices Floppy disk can be written to and erased, 1.44Mb CD ROM Can be written to but not erased, 700Mb Hard Drive stores many Gigabytes, can be written to and erased Zip Drive can be written to and erased, 100 250Mb Terminals Dumb Terminal A dumb terminal has no processing capabilities as they have no memory or processor of their own, it has only a monitor, keyboard and mouse. They are connected to a central processor. Intelligent Terminal An intelligent terminal contains memory and a CPU and is a standalone device. It only has to connect to the central processor when needed. Command to find terminal type terminfo Input / Output Devices Dumb Terminal Input keyboard and mouse. Output monitor Intelligent Terminal Input keyboard, mouse, scanner, touch screen. Output monitor, printer, speakers Software Components Kernel The Kernel is the heart of the operating system, the lowest level or the central part. Communication with the hardware is through the kernel. In multi user operating systems it is the kernels job to keep each process and user separate and to organize access to the system hardware, including CPU, memory, disk and other I/O devices. Device Handlers A device is any piece if hardware that is used in an operating system. A device handler is a piece of software within the operating system that communicates with the devices and tells them what to do. This is part of the operating system that is responsible for servicing requests of the device request queue. Spoolers (Simultaneous peripheral operations on-line) Spooling is used when data is waiting to go to an output device after it has been processed. The data is placed into a queue so that the CPU can process something else instead of having to slow down to the speed of the output device. Spoolers are used on mainly old devices e.g. old printers that can only handle one job at a time User Interface This is how the user can view the data within the operating system. The main types of user interfaces are; the graphical user interface e.g. Windows and Command driven interface e.g. MS DOS and standard UNIX. The CDI was more complicated to use than a GUI as you would have to know certain commands to do very basic tasks. Bibliography Index http://physinfo.ulb.ac.be/cit_courseware/opsys/ostart.htm http://electronics.howstuffworks.com/operating-system1.htm http://physinfo.ulb.ac.be/cit_courseware/opsys/ostart.htm http://www.canberra.edu.au/~sam/whp/unix-cmd.html http://cm.bell-labs.com/

Comparing Illustrations of H. A. and Margret Reys Opposites :: Compare Contrast Comparing

Comparing Illustrations of H. A. and Margret Rey's Opposites and Beatrix Potter's The Tale of Peter Rabbit Margret Rey and husband H.A. Rey are well known for their writing and illustrating the Curious George books. This paper is going to look at the way H. A. and Margret Rey and Beatrix Potter as authors and illustrators use images to express their feelings through these characters. H. A. and Margret Rey's Opposites, and Beatrix Potter's The Tale of Peter Rabbit will be compared and contrasted. These two authors H. A Rey and Beatrix Potter has created two similar characters. Curious George and Peter Rabbit seem to find mischef wherever they go. There are also some distinct differences between these two books. In Margret Rey's Opposites, husband H. A. uses cartoon looking characters making the illustrations interesting giving it a feeling of fantasy. The characters in this book are all smiling and the colors seem to be more bright and vivid to catch the readers eye. The color yellow to me represents George's curiosity. This bright yellow also makes for a focal point in many of the Curious George books. For example in Curious George's Opposites bright yellow is represented on the majority of the pages. From a small flower taking up just a little area to the pigpen which takes up most of the page. To me this shows the importance or trademark of the yellow in Curious George series. Another book H.A. and Margret wrote was Curious George the original. This book is deal ing with similar characteristics. Curious George becomes curious when he sees that yellow hat lying on the ground. Again the characters are more fantasy like. The faces are all smiling which represents how this is an unrealistic story. Rey tends to use this kind of illustration to show how this is more of fantasy writing and not so realistic. He also uses round shapes rather than pointed or jagged representing innocence. As Curious George seems to be so innocent when he gets into this mischef. Another character that is curious and is always getting into mischef is Peter in The Tale of Peter Rabbit. In this book Beatrix Potter uses a different type of illustrations than does H.A. and Margret Rey.

Harnischfeger Corporation

Financial Reporting & Analysis April 19th, 2013 Case Study- Harnischfeger Corporation 1. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements. The accelerated depreciation method was changed from to straight-line on all company assets that caused to increase after-tax net income for 1984 by $11. 005 million. The cumulative effect of change in 1984 there will be no reduction in the depreciation expense due to change. in 1984 decreased by $7. 0 million over the previous year.Most of this reduction was a result of the company's agreement with Kobe Steel, Ltd. Under this agreement, Kobe agreed to reimburse Harnischfeger up to $17. 0 million dollars of R;D expense over a period of three years. However, some students argue that Harnischfeger may be cutting its research budget since the actual reduction in Harnischfeger's    1984 R&D expense is more than one-third of this amount. (See Exhibit 4, Notes 6 and 9, in the case. ) 8 . Effective 1984, Harnischfeger began to include in its net sales products purchased from Kobe Steel, Ltd. , and sold to third parties by Harnischfeger.Previously only the gross margin on Kobe-originated equipment was included in Harnischfeger's financial statements. This increased Harnischfeger's sales in 1984 by $28. 0 million but had no impact on its profits. Some students would mistakenly argue that this had an impact on Harnischfeger's net income. (See Exhibit 4, Note 2, in the case. ) Although some of the above are pure accounting decisions with no direct cash-flow consequences, the other decisions affect the company's reported profits as well as its cash flow. The instructor should ask the class to identify the latter-type decisions among the above.Discussion of Question 2 The above analysis shows that most, if not all, of the reported profits of Harnischfeger in 1984 are produced by accounting changes. Therefore, the accounting changes helped the management report a signific ant profit rather than a modest loss. The instructor should point this out to the class and ask: Why do you think the management of Harnischfeger made these accounting changes? Students point out a number of possible motives for the accounting changes: 1. Boost the company's stock price so that the company could raise new capital, 2.Meet the earnings targets of the company's top management compensation plan, 3. Avoid the violation of debt covenant restrictions, and 4. Improve the company's image with the customers, dealers, and prospective employees. Some students argue that the analysis in Question (1) shows that it is too complicated for an average investor to â€Å"see through† the impact of all the accounting changes. They further point out that, even if many analysts recognize the effect of the company's accounting decisions on the 1984 profits, it is quite unlikely that the analysts would be able to assess the impact of these changes in future years.Other students are l ikely to argue that the market processes the reported profit numbers efficiently. They argue that there are some sophisticated analysts who could perform the analysis that was done in the class. The instructor should encourage this discussion. At some point in the discussion, the instructor should intervene and summarize the evidence from the research literature: 1. There is considerable evidence in finance and accounting literature that shows that the capital markets are generally efficient. 2.For stock prices to reflect reality in an unbiased manner, it is not necessary that everyone in the market has to process the information correctly. As long as there are some sophisticated investors who can â€Å"see through† the company's accounting changes, the stock price will reflect this due to the possibility of arbitrage by these investors. 3. The accounting studies that examine the stock market reaction to accounting changes conclude that the market is not fooled by the account ing decisions of firms. However, the evidence presented in these studies is not conclusive.Also, these studies do not examine whether the stock market recognizes the recurring effects of accounting changes. Without additional research, it is difficult to make conclusive statements on this issue. 4. Even if capital markets see through the effects of accounting changes, managers may believe otherwise in making accounting decisions. This is likely to happen if there are no significant penalties associated with such behavior. Even if investors fully recognize the impact of Harnischfeger's accounting decisions, there are other reasons for the company's managers to make these decisions.As Exhibit 2 in the case indicates, the top management of the company is awarded significant bonuses based on the company's reported profits. This provides an incentive for the managers to boost profits through accounting changes. However, if the compensation committee of the company's board of directors re cognizes this possibility, the committee could adjust the reported profits before awarding management bonuses. The instructor should challenge the students by asking: If investors can see through these changes from public information, why can't the board do it, especially when it has access to additional information in the firm?The third possible motive that is mentioned by the students is the desire of Harnischfeger's management to avoid the violation of debt covenant restrictions. Since the company recently experienced the painful consequences of violating these restrictions, it is plausible that the management changed the accounting policies to avoid future violations of the debt restrictions. If debt covenants are specified in terms of accounting numbers, managers have an incentive to choose accounting policies to minimize the violation of the covenants.However, if lenders recognize this possibility, lending agreements would be modified to avoid this possibility as long as the c ost of such a modification is not significant. The fourth possibility is that the accounting decisions are motivated by a desire to convince the company's customers, suppliers, dealers, and employees that Harnischfeger is again back on track and is viable. Given the nature of the company's products, a lack of confidence in the company's viability is likely to impair the company's ability to sell its products.In fact, the company was negotiating long-term contracts in 1984 with the governments of Turkey and China. It is quite possible that the company's return to profitability might have helped the management in this respect. Similarly, the company's ability to attract and retain talented employees might have been helped by the image that the company was back on track. During my visit to the company, Harnischfeger's management pointed out one additional factor in the company's accounting decisions: the role of internal management considerations.The company used the same set of accoun ting rules for external reporting and for internal management accounting. The company's product pricing was based on fully allocated product costs, and therefore its accelerated depreciation policies apparently caused its products to be overpriced relative to competition. In addition, the higher depreciation charges led to increased capital reinvestment demands from its divisions for maintaining and replacing the company's fixed assets.The company's management mentioned three principal reasons for its accounting decisions: (1) a belief that the external users of accounting data did not adjust for Harnischfeger's conservative financial reporting when comparing the company's performance with other companies in the industry, (2) the unpleasant experience with its debt covenant restrictions, and (3) the interaction between management accounting and external reporting. These reasons are discussed in greater detail in my paper, â€Å"The Anatomy of an Accounting Change. â€Å"Underlying all the accounting changes was a reporting philosophy outlined by the then chief financial officer and the current president of the company: In accounting there is no such thing as absolute truth. The same underlying reality can be accounted for using a range of assumptions. The earlier philosophy of this company was to choose the conservative alternative whenever there was a choice. Now we have decided to change this. We would like to tell the world that we are alive and well. We wish to tell the truth but do not want to be overly conservative in doing so.When the outside world compares our financial performance with that of other companies, they may or may not take the time and effort to untangle the effects of the differences in financial policies that various companies follow. My own belief is that people adjust for the obvious things like one-time gains and losses but have difficulty in adjusting for ongoing differences. In any case, these adjustments impose a cost on the user . If people adjust for the differences in accounting policies when they compare us with other companies, then it should not matter whether we follow conservative or liberal policies.But suppose they do not adjust. Then clearly we are better off following the more liberal policies than conservative policies. I am not sure whether people make the adjustments or not, but either way we wish to present an optimistic version of the picture and let people figure out what to do with the numbers. As a company you have to put the best foot forward if you want to raise capital, convince customers that you are a viable company, and attract talented people to work for the company. I feel that the financial reporting should help rather than hinder the implementation of our operating trategy. In my opinion, the changed accounting format highlights the effectiveness of our strategy better than the old policies do. The instructor can sum up the class discussion on question (2) by mentioning the view s of the management described above. Discussion of Question 3 After completing the analysis of Harnischfeger's accounting policy changes, the class should be asked to assess the company's future. At this point, I go back to my original question to the class, namely, â€Å"Is it worthwhile to invest in the company's stock in early 1985?    I call on a student who considers the company's stock a good investment and ask him or her to explain why. Harnischfeger's turnaround strategy consists of four elements: (1) changes in top management, (2) cost reductions to lower the company's break-even point, (3) reorientation of the company's business, and (4) restructuring the company's finances to facilitate the implementation of the reorientation strategy. The changes in the top management seem to be good. The new chief executive officer (CEO) has considerable experience in Harnischfeger's industry.The new CEO demonstrated his credibility with the financial community by successfully negoti ating with the company's lenders to restructure the company's debt. The new management has taken several steps in the right direction. The company's cost-reduction programs seem to be paying off. These programs were helpful in reducing the company's losses in 1984. The financial management of the company also seems to be sound. The cost-reduction programs and the pension restructuring have improved the company's cash flow.The total cash-flow analysis, shown in Exhibit 1, indicates that the company has been able to generate positive cash flow from its operations in 1984. The company raised substantial new capital through a public offering of debentures and common stock and used the proceeds to pay off all of the company's restructured debt. Finally, the company's business strategy seems to be sound. The management recognized the potential to exploit the company's strength in the material handling equipment business.Through its Harnischfeger Engineers subsidiary, the company planned t o expand in this area and concentrate on the high margin â€Å"systems† business. This strategy is likely to help the company to move away from the mining and construction equipment business, which is a low-growth and cyclical industry, to a higher-growth and more stable business. Students who are optimistic about the company's future cite the above factors as the reasons for their support for the company and its management.They argue that these factors indicate that the company's new management has the right ideas and knows how to turn the company around. These students suggest that the management's accounting decisions were part of its attempt to implement the company's strategy and are therefore constructive. The instructor should wrap up the case discussion by reviewing the company's motives for its accounting decisions. The instructor should point out that understanding these motives is essential for an analyst who is interested in assessing the company's current perform ance and its future potential.The instructor may end the class by taking a second vote on the investment potential of the company's stock and sharing with the class the subsequent events described below. SUBSEQUENT DEVELOPMENTS The following events describe the developments subsequent to the time of the case. As can be seen, Harnischfeger seems to have succeeded in implementing its strategy effectively. Also, the company continued to liberalize its financial reporting policies. 1985 1. The company changed its accounting for duration patterns and tooling. Previously, the cost of the patterns and tooling was expensed in the year of acquisition.Under the new method, these costs are capitalized and amortized over their estimated useful lives. 2. Harnischfeger reported a net profit of $0. 74 per share for fiscal 1985. The accounting change described above contributed $0. 24 per share to the reported profits. 3. The company raised $147 million by issuing preferred stock. 1986 1. Mr. Goess el was appointed as the chairman and CEO of the company, and Mr. Grade was appointed as the president and chief operating officer (COO). Previously, Mr. Goessel was the president and COO, and Mr. Grade was the CFO. 2.Harnischfeger acquired Beloit Corporation, a producer of papermaking machinery and systems, for $175 million in cash. Later in the year, stock equivalent to a 20% equity interest in Beloit was sold to Mitsubishi Heavy Industries, Ltd. , for $60 million in cash. 3. The company acquired Syscon Corporation, a firm based in Washington, DC for $92 million in cash. Syscon developed advanced computer systems for military markets. 4. Harnischfeger announced a plan to sell the company's Construction Equipment Division for approximately $17 million in cash and $55 million in debentures. . The company reported that Harnischfeger Engineers received a major order for the design of an automated car assembly plant. 6. Harnischfeger reported a net loss of $1. 14 per share for fiscal 19 86. This consisted of a profit of $2. 15 per share from continuing operations, a loss of $4. 45 per share from discontinued operations (Construction Equipment Division), and a gain of $1. 16 per share from the adoption of the new pension accounting rules. 1987 1. Harnischfeger received a takeover offer from Columbia Ventures, Inc. , for $19 per share in cash.The company considered the offer inadequate and rejected it. Exhibit 1 Total Cash-Flow Analysis ($ in thousands) |                                                                                                          |1984                         |1982                         |1981                         | |                                                                                                          |                               |                               |                               | |Working capital from operations                                                          | $ 2,961                   | $ 1,763                   | $ (55,902)             | |(Increase)/decrease n accounts receivable                                           |(23,908)                   |(5,327)                   |42,293                      | |(Increase)/decrease in inventories                                                       |9,282                      |56,904                      |26,124                      | |(Increase)/decrease in refundable income taxes and related interest    |                               |                               |                               | |                                                                                                          |11,289                      |(2,584)                   |(6,268)                   | |(Increase)/decrease in other current assets                                        |259                         |10,008                      |(439)                      | |Increase/(decrease) in accounts payable                                              |16,488                      |(1,757)                   |(3,302)                   | |Increase (decrease) in employee compensation and benefits payable       |                               |                               | |                                                                                                          |698                         |(15,564)                   |(3,702)                   | |Increase/(decrease) in accrued plant closing costs                               |(3,888)                   |(14,148)                   |20,496                      | |Increase (decrease) in other current liabilities                                  |    (3,181)                |    (15,927)                |    (3,030)                | |Cash from operating cycle                                                                   | $ 10,000                | $ 13,368                | $ 16,270                | |Minus plant and equipment additions                                                    |    (5,546)                |    (1,871)                |    (10,819)                | |Cash before dividends, investments, and    external financing                |                               |                               |                               | |                                                                                                          |$ 4,454                   |$ 11,497                   |$ 5,451                   | |Minus cash dividends                                                                   à ‚         |    0                         |    0                         |    (2,369)                | |Cash before investments and external financing                                     | $ 4,454                   | $ 11,497                | $ 3,082                   | |Minus advances to unconsolidated companies                                           |(2,882)                   |0                            |0                            | |Plus other                                                                                           |    269                      |    1,531                   |    848                      | |Cash before external financing                                                             | $ 1,841                   | $ 13,128                | $ 3,930                   | |                                                                                                          |                               |                               |                               | |External Financing:                                                                            |                               |                               |                               | |                                                                                                          |                               |                               |                               | |Proceeds from senior notes and subordinated                                        |                               |                               |                               | |Debentures                                                                                           |$ 120,530                |$ 0                         |$ 0                         | |Conversion of export and factored receivable sales to debt                   |                               |                               |                               | | 0                            |23,919                      |0                            | |Restructured debt                                                                               |0                            |158,058                   |0                            | |Debt replaced, including conversion of    receivable sales of 23,919       |                               |                               |                               | |                                                                                                          |0                            |(158,058)                |0                            | |Repayments of debt                                                                               |(161,500)                |(760)                      |(9,409)                   | |Increase (repayment) of short-term bank notes payable                         |2,107                      |(3,982)                   |(2,016)                   | |Other increases in debt                                                                      |1,474                      |0                            |25,698                      | |Issuance of common stock                                                                      |21,310                      |0                            |449                         | |Issua nce of common stock warrants                                                       |6,663                      |0                            |0                            | |Salaried pension assets reversion                                                       |    39,307                   |    0                         |    0                         | |Cash from external financing                                                                | $ 29,891                | $ 19,177                | $ 14,722                | |Net increase (decrease) in cash    and temporary investments                   |                               |                               |                               | |                                                                                                          |$ 31,732                   |$ 32,205                   |$ 18,652                   | 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? It increased the net income to $11 million for 1984 or $. 93 per common and common equivalent share. The straight-line method will allow the assets to continue to depreciate in the same amount for the life of the asset.This change will increase profit in future years even thought the depreciation expense in strait-line will be higher that would’ve been with accelerated method. 3. What is the effect of the depreciation lives change? How will this change affect future reported profits? As a result of going t o strait-line the company also has changed its estimated depreciation lives on certain U. S. plants, machinery and equipment and residual values on certain machinery and equipment, which increased net income for 1984 by $3. 2 million or $. 27 per share. No income tax effect was applied to this change. This change should report higher profits in the coming years. $3. 2 million or $. 27 per share. No income tax effect was applied to this change. This change should report higher profits in the coming years. 4.The depreciation accounting changes assume that Harnischfeger’s plant and machinery will last longer and will lose their value more slowly. Given the business conditions Harnischfeger was facing in its primary industries in 1984, are these economic assumptions justified? Not necessarily, they can not fully predict the outcome of these changes but history shows them that as long as their plant machinery are more up to date production will perform at a better rate which shoul d lead to valuable resources needed to conduct good business. 5. In Note 7, Harnischfeger describes the effect of LIFO inventory liquidation on its reported profits in 1984.Describe what is meant by LIFO liquidation and how liquidation affects a company’s income statement and balance sheet. By LIFO liquidation means when a company’s accounting sells its oldest inventory since the current sales are higher then current purchases then the liquidation will occur, meaning that older inventory will be sold. The effect of the LIFO liquidation on the company’s income statement is an increase in net income by $2. 4 million or $. 20 in fiscal year 1984. There is no income tax effect. On the balance sheet there is a decrease of inventory, due to liquidation. 4. The depreciation accounting changes assume that Harnischfeger’s plant and machinery will last longer and will lose their value more slowly.Given the business conditions Harnischfeger was facing in its primary industries in 1984, are these economic assumptions justified? They cannot fully predict the outcome of these changes but history shows; however, we know they were experiencing a drop in sales this would also mean that they were giving less use to their machinery, and that would cause less wear and tear to the machinery justifying and increase on the useful life of the asset. 5. In Note 7, Harnischfeger describes the effect of LIFO inventory liquidation on its reported profits in 1984. Describe what is meant by LIFO liquidation and how liquidation affects a company’s income statement and balance sheet.The liquidation means selling of older inventory since the current sales are higher then current purchases then the liquidation will occur and as result any inventory not sold in previous periods must be liquidated. The company will benefit by an increase in net income by $2. 4 million or $. 20 in fiscal year 1984. Meaning that the net loss of previous year 1983 was reduced by a pproximately 15. 6 million. The balance sheet would have decrease of inventory from 12. 6 mil in 1983 to 5. 5 mil in 1984. 6. Note 8, states Harnischfeger’s allowance for doubtful accounts. Compute the ratio of the allowance to gross receivables (receivables before the allowance) in 1983 and 1984.What would the allowance have been if the company maintained the ratio at the 1983 level? How much did the pre-tax income increase as a result of the changed ratio in 1984? The company's provision for doubtful accounts receivables as a percentage of total receivables was 8. 4% in 1984. The corresponding percentage in 1983 was 11. 3%. If the company maintained the same percentage provision in the two years, the bad debt expense in 1984 would have been $1. 5 million more than the reported expense. 7. Note 9, page 216, states that Harnischfeger decreased R&D expense in 1984 relative to the previous two years. Do you think this change was motivated by business considerations or accountin g considerations?How did this change affect the company’s reported profits in 1984? Also R&D expense in 1984 decreased by $7. 0 million over the previous year. Most of this reduction was a result of the company's agreement with Kobe Steel, Ltd. Under this agreement, Kobe agreed to reimburse Harnischfeger up to $17. 0 million dollars of R;D expense over a period of three years plus the company was reduced in its size so there was no need to that big expenditures on R;D. 8. Note 11, describes a number of changes in Harnischfeger’s pension plans in 1984. Describe these changes as clearly as you can. What are the economic consequences of these changes to Harnischfeger and its workers?The reduction in benefits and wedges were significant from 1982 to 1984. In 1984 the pension expenses accounted for 1. 9 million, 1983 for 6. 5 million and 1982 for 12. 2 million The change in the return on investment assumption is for all US plans. The economic consequence is that there will be less expenditure made by these pension owners during the lifetime of their pension. The company established a new plan, which goal was an improvement in the minimum pension benefit. This constituted in a restructure of the Salaried Employees’ Retirement Plan. From one side that decision could help the company to rebuild the trust of customers and suppliers for continuing in business.From the other side, the workers would suffer a significant economic lost and could lose the motivation to work for the company. But there is a possibility that a positive view could emerge because they could appreciate the company’s efforts to keep them working there, and then cooperate to take the company to the next level. 9. How did the pension plan changes affect Harnischfeger’s financial statements in 1984? Are these changes likely to affect future profits? The effect of the changes in the investment return assumption rates for all U. S. plans, together with the 1984 restruc turing of the U. S. Salaried Employees' Plan, was to reduce pension expense by approximately $4. 0 million in 1984 and $2. million in 1983, and the actuarial present value of accumulated plan benefits by approximately $60. 0 million in 1984. This may have an effect on future profits. The pension plan changes affected positively the statements in 1984. Less assets were available for benefits; therefore, more income was reflected in the financial statements, which contributed to the cash to pay debt obligations. Furthermore, if reducing the debt, company could recover the banks and shareholder’s trust. 10. Summarize all the accounting changes Harnischfeger made in 1984, and their effects on pre-tax profits and cash flows in 1984. 1. 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. The effect of the change in sales calculation was an increase in both aggregate sales and cost of sales by $28 million. Also, profit margin dropped from 1. 55% to 1. 44%, which represented a 7. 1% change in profit margin. 2. Change in the fiscal year for some foreign subsidiaries. By changing the fiscal year of foreign subsidiaries (ending period of September 30 instead of July 31), the effect was the lengthening of the 1984 reporting period for the subsidiaries from 12 months to 14 months.This increased sales by $5. 4 million. 3. 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. The effect of the change in depreciation method (straight-line method) was a net income of $11 million realized in 1984. Overall, depreciation charges resulted in an increase of $3. 2 million in net income in 1984. 4. Change in the use LIFO liquidat ion in inventory valuation. The effect of LIFO inventory liquidation was an increase in 1984 net income by $2. 4 million, as gains. 5. Change in the allowance for doubtful accounts.The company adjusted its allowance for doubtful accounts to 6. 7% of sales for 1984 from 10% of sales in 1983. The effect of the change in the allowance for doubtful accounts was that it resulted in $2. 9 million in operating income for 1984. 6. Change in the R&D expenses. Harnischfeger significantly reduced its R&D expenses to $5. 1 million in 1984, from 412. 1 million in 1983. The effect of the change in R&D expenses was an increase in operating profit by $9. 1 million. 7. Change in employee pension plans. The effect of the change in pension plans was a reduction in pension expenses by $14 million and increase in net income by $3. 9 million, and a positive cash flow. 11.Accounting statements are used by investors, lenders, customers, employees, and governments in dealing with Harnischfeger. Among these groups, who is most likely to â€Å"see through† the above accounting changes, and who is least likely to do so? The least likely to â€Å"see through† the accounting changes are just normal people who don’t know accounting concepts because some methods of reporting can overstate or understate the numbers without a sustainable change so investors, lenders, and governments should be the ones to most likely â€Å"see through† the change and based on what they see they make a decisions. Employees in accounting, finance, and upper management should be able to â€Å"see through† the changes. 12.Are the accounting changes likely to help or to hinder Harnischfeger’s ability to implement its business plan? Be as specific as possible. Even thought the changes indicate an optimistic move, it does not guarantee that the company is going to be able to implement its business plan. The changes made strongly justify company’s boost in the periods an alyzed. From my point of view, company reflects a positive result on management through its financial reports. Basically the mission to satisfy shareholders and business related entities such as banks and suppliers was accomplished by showing the ability to overcome financial problems through management based on the financial statements.However, the accounting practice can be a matter of numbers’ convenience and it can be altered just to show easy actions. 13. Overall, what is your assessment of Harnischfeger’s future as of 1984? The company is taking a risk by expecting that the one-time boost in income and cash in 1984 will enable the company to successfully expand internationally and grow in new high tech areas and become profitable once again. They wanted to make their financial statements look pretty so that investors would buy their stocks and suppliers would continue giving credit for being able to produce product and sell. They need to stop playing with account ing methods and hiding the true story otherwise they will be in danger to not survive in a long run.

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