SOLUTION MANUAL Construction Accounting and Financial Management, 4th Edition Steven J. Peterson Chapters 1 - 18, Complete Newest Version

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CONTENTS
New BGBG to the
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Chapter 1: Construction Financial Management
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Chapter 2: Construction Accounting Systems
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Chapter 3: Accounting
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Chapter 4: More BGBG BGBG Construction BGBG Accounting 23

Chapter 5: Depreciation
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Chapter 6: Analysis of Financial Statements
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Chapter 7: Managing
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Chapter 8: Determining
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Chapter 9: Managing
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Chapter 10: Setting BGBG BG BG Profit B G B G Margins B G B G for B GB G Bidding 67

Chapter 11: Profit B GB G B G B G Center BGBG Analysis 70

Chapter 12: Cash Flows For
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Chapter 13: Projecting
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Chapter 14: Cash Flows
B GB G BGBG B GB G for BGB G a BGBG Construction Company BGBG 91

Chapter 15: Time BGBG BGBG Value BGBG of Money B GBG 93

Chapter 16: FinancingBGBG BGBG a BGBG Company’s Financial Needs BGBG B GB G 99

Chapter 17: Making BGBG BGBG Financial Decisions BGBG 111

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




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New to the Fourth Edition BGBG BGBG BGBG BGBG




The major BGBG BGBG changes to the fourth edition include the following
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 The business failure rate for construction companies in Chapterj
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1 have beenupdated.
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 Sections on cost segregation and bonus depreciation have been added to
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Chapter 5.
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 The discussion of typical median ratios in Chapter 6 has been updated.
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 A section on the monitoring and controlling process has been added to
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Chapter 7.
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 A section on managing design-build costs has been added to Chapter 7.
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 The wages, social security, and Medicare costs were updated in
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Chapters 8, 9,and 14.
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 A weekly cash flow problem has been added to Chapter 12.
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 The income tax regulations in Chapter 13 have been updated
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to incorporateprovisions of The Tax Cuts and Jobs Act passed
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in December 2017.
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 The project cash flows used to develop an annual cash flow
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for a construction company have been expanded to cover
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the entire project (including work done inthe prior year) and
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the calculation of the underbillings/overbillingsj has been
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included in Chapterj 14.
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 The effects ofj taxes on decision has been updated in
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Chapterj 18 to incorporate theTax Cuts and Jobs Act.
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The Instructor’s Manual includes a list of learning objectives, instructional
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hints, suggested activities, and resources forj each chapter. Files for the
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figures and tables in the
BGBG textbook
BGBG are found on
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website. It is my hope that these resources will make it easier
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for course instructors to teach the material in a
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Because
B G B G the courses that use this textbook
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diverse, it is impossible to organize the chapters into one best order.
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Each instructor should consider
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determine which chapters need to be taught and in what order.
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Best BGBG wishes,
Steven J. BGBG BGBG Peterson, MBA, BGBG BGBG PE
Chapter 1: Construction Financial Management BGBG BGBG BGBG BGBG




Learning Objectives BGBG




At BGBG the completion of this chapter the student
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 Explain why financial management
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company.
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 Explain why financial management is different for construction
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companies than formost other industries.
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 Understand that all managerial employees from the owner to
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the crew forepersonplay a role in financial management ofj a
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construction company.
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Instructional Hints BGBG




 Compare a construction company to a manufacturing plant.
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Emphasize the differences between a construction company and a
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manufacturing plant, particularly: construction companies build
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unique products and the equipment isnot usually stationary at
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single location. These are the reasons
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needsj a job cost system and an equipment cost system.
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Activities
 Invite a financial manager (for example, an accountant or general
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manager) from aconstruction company to your class to discussj
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their role as a financial manager.
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 Have each student interview a management employee forj a
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construction company.The interviews should include owners, project
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managers, superintendents, and forepersons. Each student is to
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find out how the employee contributes to the financial
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management of the company. Discuss their findings in class.
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Instruction Resources BGBG




 The figures from this chapter in electronic format and
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PowerPoint slides can befound at the instructor’s website.
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 Data on construction failures can be obtained from the Surety
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Information Office(www.sio.org).
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 Current data on construction company failures can be found atj
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http://www.census.gov/ces/dataproducts/bds/data_firm.html. The most
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useful datacomes from reports that include the sector (e.g., Sector,
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Firm Age by
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construction can be separated from other industries.
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Solutions toj the Textbook Problems
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1. They are: 1) ineffective financial management systems, 2) bank
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line ofj
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estimating and/or job cost reporting,
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4) poor project management, and 5) no comprehensive business plan.
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