a company should use process costing
Enron Corporation was an American energycommoditiesand services company based in HoustonTexas.
At the end ofit was revealed that Enron's reported financial condition was sustained by an institutionalized, systemic, and creatively planned accounting fraudknown since as the Enron scandal. Enron has become synonymous of willful corporate fraud and corruption.
The scandal also brought into question the accounting practices and activities of many corporations in the United States and was a factor in the see more of the Sarbanes—Oxley Act of The scandal also affected the greater business world by causing the dissolution of the Arthur Andersen accounting firm, which had been Enron's main auditor for years.
It ended its bankruptcy during Novemberpursuant to a court-approved plan of reorganization. One of Enron's primary predecessors was InterNorthwhich was formed inin Omaha, Nebraskajust a few months after Black Tuesday. The low cost of natural gas and the cheap supply of labor during the Great Depression helped to fuel the company's early beginnings, doubling in size by Over the next 50 years, Northern expanded even more as it acquired many energy companies. It was reorganized in as the main subsidiary of a holding companyInterNortha diversified energy a company should use process costing energy-related products firm. Although most of the acquisitions conducted were if, some ended poorly.
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InterNorth competed with Cooper Industries unsuccessfully over a hostile takeover of Crouse-Hinds Companyan electrical products manufacturer. Cooper and InterNorth feuded in numerous suits during rather than job order costing course of the takeover that were eventually settled after the transaction was completed. By the s, InterNorth became a major force for natural gas production, transmission, and marketing as well as for natural gas liquids, and was an innovator in the plastics industry.
Under the leadership of CEO Robert Herring from tothe company took advantage of the unregulated Texas natural gas market and the commodity surge in the early s to became a dominant force in the energy industry. Toward the end of the s, HNG's luck began to run out with rising gas prices forcing clients to switch to oil. A company should use process costing Herring's death inM. Matthews briefly took over as CEO in a 3-year stint with initial success, but ultimately, a big dip in earnings led to his exit.
InKenneth Lay nemesio yabut Matthews and inherited the troubled conglomerate. With its conservative success, InterNorth became a target of corporate takeovers, the most prominent originating with Sbould Jacobs. The name was eventually dismissed over its apparent likening to an intestine and shortened to Enron.
In addition, it ramped up its electric power and natural gas efforts. In andthe company rather than job order costing power plants and cogeneration units to its portfolio. Enron adopted the idea and called it the "Gas Bank". The division's success prompted Skilling to join Enron as the head of the Gas Bank in Over the course of the s, Enron made a few changes to its business plan that greatly improved the perceived profitability of the company.
First, Enron invested heavily in overseas assets, specifically energy.]
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