Solution Manual for Construction Accounting and Financial Management 4th Edition by Steven J. Peterson |9780135232873 |Chapters 1–18 – Complete Solutions

SOLUTION MANUAL


Construction Accounting and Financial Management,


4th Edition Steven J. Peterson
Chapters 1 - 18, Complete Newest Version




Construction Accounting and Financial Management,
le le le le

, CONTENTS
New to the Fourth Edition
le le le le 1

Chapter 1: Construction Financial Management
le le le le 2

Chapter 2: Construction Accounting Systems
le le le le 4

Chapter 3: Accounting Transactions
le le le 7

Chapter 4: More Construction Accounting
le le le le 23

Chapter 5: Depreciation
le le 34

Chapter 6: Analysis of Financial Statements
le le le le le 50

Chapter 7: Managing Costs
le le le 58

Chapter 8: Determining Labor Burden
le le le le 62

Chapter 9: Managing General Overhead Costs
le le le le le 65

Chapter 10: Setting Profit Margins for Bidding
le le le le le le 67

Chapter 11: Profit Center Analysis
le le le le 70

Chapter 12: Cash Flows For Construction Projects
le le le le le le 75

Chapter 13: Projecting Income Taxes
le le le le 87

Chapter 14: Cash Flows for a Construction Company
le le le le le le le 91

Chapter 15: Time Value of Money
le le le le le 93

Chapter 16: Financing a Company’s Financial Needs
le le le le le le 99

Chapter 17: Making Financial Decisions
le le le le 111

Chapter 18: Income Taxes and Financial Decisions
le le le le le le 130




Construction Accounting and Financial Management, le le le le

, New to the Fourth Edition le le le le




The major changes to the fourth edition include the following
le le le le le le le le le




• The business failure rate for construction companies in Chapter 1 h
le le le le le le le le le le



ave beenupdated.le le




• Sections on cost segregation and bonus depreciation have been added to Chapt
le le le le le le le le le le le



er 5. le




• The discussion of typical median ratios in Chapter 6 has been updated.
le le le le le le le le le le le




• A section on the monitoring and controlling process has been added to Chapter
le le le le le le le le le le le le le



7.
• A section on managing design-build costs has been added to Chapter 7.
le le le le le le le le le le le




• The wages, social security, and Medicare costs were updated in Chap
le le le le le le le le le le



ters 8, 9,and 14. le le le le




• A weekly cash flow problem has been added to Chapter 12.
le le le le le le le le le le




• The income tax regulations in Chapter 13 have been updated to inc
le le le le le le le le le le le



orporateprovisions of The Tax Cuts and Jobs Act passed in Decem
le le le le le le le le le le le



ber 2017. le




• The project cash flows used to develop an annual cash flow for a constru
le le le le le le le le le le le le le



ction company have been expanded to cover the entire project (includin
le le le le le le le le le le



g work done inthe prior year) and the calculation of the underbillings/ov
le le le le le le le le le le le le



erbillings has been included in Chapter 14. le le le le le le




• The effects of taxes on decision has been updated in Chapter 18 to incorp
le le le le le le le le le le le le le



orate theTax Cuts and Jobs Act. le le le le le le




The Instructor’s Manual includes a list of learning objectives, instructional hin
le le le le le le le le le le



ts, suggested activities, and resources for each chapter. Files for the figures and
le le le le le le le le le le le le



tables in the textbook are found on the instructor’s website. It is my hope that t
le le le le le le le le le le le le le le le le



hese resources will make it easier for course instructors to teach the material in
le le le le le le le le le le le le le



a meaningful manner. Because the courses that use this textbook are quite div
le le le le le le le le le le le le le



erse, it is impossible to organize the chapters into one best order. Each instruct
le le le le le le le le le le le le le



or should consider his or her individual program and determine which chapters
le le le le le le le le le le le le



need to be taught and in what order.
le le le le le le le




Best wishes, le




Steven J. Peterson, MBA, PE le le le le

, Chapter 1: Construction Financial Management le le le le




Learning Objectives le




At the completion of this chapter the student should be able to:
le le le le le le le le le le le




• Explain why financial management is so important to a construction company.
le le le le le le le le le le




• Explain why financial management is different for construction companie
le le le le le le le le



s than formost other industries.
le le le le le




• Understand that all managerial employees from the owner to the crew f le le le le le le le le le le le



orepersonplay a role in financial management of a construction compan le le le le le le le le le le



y.


Instructional Hints le




• Compare a construction company to a manufacturing plant. Emphasiz le le le le le le le le



e the differences between a construction company and a manufacturin
le le le le le le le le le



g plant, particularly: construction companies build unique products an
le le le le le le le le



d the equipment isnot usually stationary at single location. These are t
le le le le le le le le le le le le



he reasons a construction company needs a job cost system and an equi
le le le le le le le le le le le le



pment cost system. le le




Activities
• Invite a financial manager (for example, an accountant or general manag
le le le le le le le le le le



er) from aconstruction company to your class to discuss their role as a fin
le le le le le le le le le le le le le le



ancial manager. le




• Have each student interview a management employee for a construction
le le le le le le le le le le



company.The interviews should include owners, project managers, supe le le le le le le le le



rintendents, and forepersons. Each student is to find out how the employ le le le le le le le le le le le



ee contributes to the financial management of the company. Discuss thei
le le le le le le le le le le



r findings in class.
le le le




Instruction Resources le




• The figures from this chapter in electronic format and PowerPoint slid
le le le le le le le le le le



es can befound at the instructor’s website.
le le le le le le le




• Data on construction failures can be obtained from the Surety Informati
le le le le le le le le le le



on Office(www.sio.org).
le le




• Current data on construction company failures can be found at http://ww
le le le le le le le le le le



w.census.gov/ces/dataproducts/bds/data_firm.html. The most Solutions t le le le le



o the Textbook Problems
le le le