Stuvia.com - The Marketplace to Buy and Sell your Study Material
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SOLUTION MANUAL g
ConstructionAccounting and Financial Management,
g g g g
4th Edition Steven J. Peterson
g g g g
Chapters1 - 18, Complete Newest Version
g g g g g g
Downloaded by: Bookista |
g g g g Want to earn $1.236
g g g
Distribution of this document is illegal
g g g g g extra per year?
g g
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
g g g g g g g g g g
CONTENTS
New to the Fourth Edition
g g g g 1
Chapter 1: Construction Financial Management
g g g 2
Chapter 2: Construction Accounting Systems
g g g 4
Chapter 3: Accounting Transactions
g g 7
Chapter 4: More Construction Accounting
g g g 23
Chapter 5: Depreciation
g 34
Chapter 6: Analysis of Financial Statements
g g g g 50
Chapter 7: Managing Costs
g g 58
Chapter 8: Determining Labor Burden
g g g 62
Chapter 9: Managing General Overhead Costs
g g g g 65
Chapter 10: Setting Profit Margins for Bidding
g g g g g 67
Chapter 11: Profit Center Analysis
g g g 70
Chapter 12: Cash Flows For Construction Projects
g g g g g 75
Chapter 13: Projecting Income Taxes
g g g 87
Chapter 14: Cash Flows for a Construction Company
g g g g g g 91
Chapter 15: Time Value of Money
g g g g 93
Chapter 16: Financing a Company’s Financial Needs
g g g g g 99
Chapter 17: Making Financial Decisions
g g g 111
Chapter 18: Income Taxes and Financial Decisions
g g g g g 130
Downloaded by: Bookista | g g g g Want to earn $1.236
g g g
Distribution of this document is illegal g g g g g extra per year?
g g
, Stuvia.com - The Marketplace to Buy and Sell your Study Materialg g g g g g g g g g
New to the FourthEdition g g g g
The major changes to the fourth edition include the following
g g g g g g g g g
The business failure rate for construction companies in Chapterj 1 have
g g g g g g g g g g
beenupdated.
g
Sections on cost segregation and bonus depreciation have been added to Chapter 5.
g g g g g g g g g g g g
The discussion of typical median ratios in Chapter 6 has been updated.
g g g g g g g g g g g
A section on the monitoring and controlling process has been added to Chapter 7.
g g g g g g g g g g g g g
A section on managing design-build costs has been added to Chapter 7.
g g g g g g g g g g g
The wages, social security, and Medicare costs were updated in Chapters 8,
g g g g g g g g g g g
9,and 14.
g g
A weekly cash flow problem has been added to Chapter 12.
g g g g g g g g g g
The income tax regulations in Chapter 13 have been updated to
g g g g g g g g g g
incorporateprovisions of The Tax Cuts and Jobs Act passed in December
g g g g g g g g g g g
2017.
g
The project cash flows used to develop an annual cash flow for a
g g g g g g g g g g g g
construction company have been expanded to cover the entire project
g g g g g g g g g g
(including work done inthe prior year) and the calculation of the
g g g g g g g g g g g
underbillings/overbillingsj has been included in Chapterj 14.
g g g g g g g
The effects ofjtaxes on decision has been updated in Chapterj 18 to
g g g g g g g g g g g g
incorporate theTax Cuts and Jobs Act.
g g g g g g
The Instructor’s Manual includes a list of learning objectives, instructional hints, suggested
g g g g g g g g g g g
activities, and resources forj each chapter. Files for the figures and tables in the textbook
g g g g g g g g g g g g g g g
gare found on the instructor’s website. It is my hope that these resources will make
g g g g g g g g g g g g g g
it easier for course instructors to teach the material in a meaningful manner. Because
g g g g g g g g g g g g g g
gthe courses that use this textbook are quite diverse, it is impossible to organize the
g g g g g g g g g g g g g g
chapters into one best order. Each instructor should consider his or her individual
g g g g g g g g g g g g g
gprogram and determine which chapters need to be taught and in what order.
g g g g g g g g g g g g
Best wishes, g
Steven J. Peterson, MBA, PE g g g g
Chapter 1: ConstructionFinancial Management g g g g
LearningObjectives g
At the completion of this chapter the student should be able to:
g g g g g g g g g g g
Explain why financial management is so important to a construction company.
g g g g g g g g g g
Downloaded by: Bookista | g g g g Want to earn $1.236
g g g
Distribution of this document is illegal g g g g g extra per year? g g
, Stuvia.com - The Marketplace to Buy and Sell your Study Material g g g g g g g g g g
Explain why financial management is different for construction companies than
g g g g g g g g g
formost other industries.
g g g
Understand that all managerial employees from the owner to the crew g g g g g g g g g g
forepersonplay a role in financial management ofja construction company.
g g g g g g g g g g
InstructionalHints g
Compare a construction company to a manufacturing plant. Emphasize the
g g g g g g g g g
differences between a construction company and a manufacturing plant,
g g g g g g g g g
particularly: construction companies build unique products and the equipment
g g g g g g g g g
isnot usually stationary at single location. These are the reasons a
g g g g g g g g g g g
construction company needsj a job cost system and an equipment cost system.
g g g g g g g g g g g g
Activities
Invite a financial manager (for example, an accountant or general manager)
g g g g g g g g g g
from aconstruction company to your class to discussj their role as a financial
g g g g g g g g g g g g g
manager.
g
Have each student interview a management employee forj a construction
g g g g g g g g g
company.The interviews should include owners, project managers,
g g g g g g g
superintendents, and forepersons. Each student is to find out how the employee
g g g g g g g g g g g g
contributes to the financial management of the company. Discuss their findings
g g g g g g g g g g g
in class.
g g
InstructionResources g
The figures from this chapter in electronic format and PowerPoint slides can
g g g g g g g g g g g
befound at the instructor’s website.
g g g g g
Data on construction failures can be obtained from the Surety Information
g g g g g g g g g g
Office(www.sio.org).
g
Current data on construction company failures can be found atj
g g g g g g g g g
ghttp://www.census.gov/ces/dataproducts/bds/data_firm.html. The most useful g g g
datacomes from reports that include the sector (e.g., Sector, Firm Age by Sector,
g g g g g g g g g g g g g
and Firm Size by Sector) because construction can be separated from other
g g g g g g g g g g g g
gindustries.
Solutions toj the Textbook Problems g g g g
1. They are: 1) ineffective financial management systems, 2) bank line ofj
g g g g g g g g g g
creditsconstantly borrowed to the limits, 3) poor estimating and/or job
g g g g g g g g g g
cost reporting,
g g
4) poor project management, and 5) no comprehensive business plan.
g g g g g g g g g
Downloaded by: Bookista | g g g g Want to earn $1.236
g g g
Distribution of this document is illegal g g g g g extra per year?
g g
g g g g g g g g g g
SOLUTION MANUAL g
ConstructionAccounting and Financial Management,
g g g g
4th Edition Steven J. Peterson
g g g g
Chapters1 - 18, Complete Newest Version
g g g g g g
Downloaded by: Bookista |
g g g g Want to earn $1.236
g g g
Distribution of this document is illegal
g g g g g extra per year?
g g
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
g g g g g g g g g g
CONTENTS
New to the Fourth Edition
g g g g 1
Chapter 1: Construction Financial Management
g g g 2
Chapter 2: Construction Accounting Systems
g g g 4
Chapter 3: Accounting Transactions
g g 7
Chapter 4: More Construction Accounting
g g g 23
Chapter 5: Depreciation
g 34
Chapter 6: Analysis of Financial Statements
g g g g 50
Chapter 7: Managing Costs
g g 58
Chapter 8: Determining Labor Burden
g g g 62
Chapter 9: Managing General Overhead Costs
g g g g 65
Chapter 10: Setting Profit Margins for Bidding
g g g g g 67
Chapter 11: Profit Center Analysis
g g g 70
Chapter 12: Cash Flows For Construction Projects
g g g g g 75
Chapter 13: Projecting Income Taxes
g g g 87
Chapter 14: Cash Flows for a Construction Company
g g g g g g 91
Chapter 15: Time Value of Money
g g g g 93
Chapter 16: Financing a Company’s Financial Needs
g g g g g 99
Chapter 17: Making Financial Decisions
g g g 111
Chapter 18: Income Taxes and Financial Decisions
g g g g g 130
Downloaded by: Bookista | g g g g Want to earn $1.236
g g g
Distribution of this document is illegal g g g g g extra per year?
g g
, Stuvia.com - The Marketplace to Buy and Sell your Study Materialg g g g g g g g g g
New to the FourthEdition g g g g
The major changes to the fourth edition include the following
g g g g g g g g g
The business failure rate for construction companies in Chapterj 1 have
g g g g g g g g g g
beenupdated.
g
Sections on cost segregation and bonus depreciation have been added to Chapter 5.
g g g g g g g g g g g g
The discussion of typical median ratios in Chapter 6 has been updated.
g g g g g g g g g g g
A section on the monitoring and controlling process has been added to Chapter 7.
g g g g g g g g g g g g g
A section on managing design-build costs has been added to Chapter 7.
g g g g g g g g g g g
The wages, social security, and Medicare costs were updated in Chapters 8,
g g g g g g g g g g g
9,and 14.
g g
A weekly cash flow problem has been added to Chapter 12.
g g g g g g g g g g
The income tax regulations in Chapter 13 have been updated to
g g g g g g g g g g
incorporateprovisions of The Tax Cuts and Jobs Act passed in December
g g g g g g g g g g g
2017.
g
The project cash flows used to develop an annual cash flow for a
g g g g g g g g g g g g
construction company have been expanded to cover the entire project
g g g g g g g g g g
(including work done inthe prior year) and the calculation of the
g g g g g g g g g g g
underbillings/overbillingsj has been included in Chapterj 14.
g g g g g g g
The effects ofjtaxes on decision has been updated in Chapterj 18 to
g g g g g g g g g g g g
incorporate theTax Cuts and Jobs Act.
g g g g g g
The Instructor’s Manual includes a list of learning objectives, instructional hints, suggested
g g g g g g g g g g g
activities, and resources forj each chapter. Files for the figures and tables in the textbook
g g g g g g g g g g g g g g g
gare found on the instructor’s website. It is my hope that these resources will make
g g g g g g g g g g g g g g
it easier for course instructors to teach the material in a meaningful manner. Because
g g g g g g g g g g g g g g
gthe courses that use this textbook are quite diverse, it is impossible to organize the
g g g g g g g g g g g g g g
chapters into one best order. Each instructor should consider his or her individual
g g g g g g g g g g g g g
gprogram and determine which chapters need to be taught and in what order.
g g g g g g g g g g g g
Best wishes, g
Steven J. Peterson, MBA, PE g g g g
Chapter 1: ConstructionFinancial Management g g g g
LearningObjectives g
At the completion of this chapter the student should be able to:
g g g g g g g g g g g
Explain why financial management is so important to a construction company.
g g g g g g g g g g
Downloaded by: Bookista | g g g g Want to earn $1.236
g g g
Distribution of this document is illegal g g g g g extra per year? g g
, Stuvia.com - The Marketplace to Buy and Sell your Study Material g g g g g g g g g g
Explain why financial management is different for construction companies than
g g g g g g g g g
formost other industries.
g g g
Understand that all managerial employees from the owner to the crew g g g g g g g g g g
forepersonplay a role in financial management ofja construction company.
g g g g g g g g g g
InstructionalHints g
Compare a construction company to a manufacturing plant. Emphasize the
g g g g g g g g g
differences between a construction company and a manufacturing plant,
g g g g g g g g g
particularly: construction companies build unique products and the equipment
g g g g g g g g g
isnot usually stationary at single location. These are the reasons a
g g g g g g g g g g g
construction company needsj a job cost system and an equipment cost system.
g g g g g g g g g g g g
Activities
Invite a financial manager (for example, an accountant or general manager)
g g g g g g g g g g
from aconstruction company to your class to discussj their role as a financial
g g g g g g g g g g g g g
manager.
g
Have each student interview a management employee forj a construction
g g g g g g g g g
company.The interviews should include owners, project managers,
g g g g g g g
superintendents, and forepersons. Each student is to find out how the employee
g g g g g g g g g g g g
contributes to the financial management of the company. Discuss their findings
g g g g g g g g g g g
in class.
g g
InstructionResources g
The figures from this chapter in electronic format and PowerPoint slides can
g g g g g g g g g g g
befound at the instructor’s website.
g g g g g
Data on construction failures can be obtained from the Surety Information
g g g g g g g g g g
Office(www.sio.org).
g
Current data on construction company failures can be found atj
g g g g g g g g g
ghttp://www.census.gov/ces/dataproducts/bds/data_firm.html. The most useful g g g
datacomes from reports that include the sector (e.g., Sector, Firm Age by Sector,
g g g g g g g g g g g g g
and Firm Size by Sector) because construction can be separated from other
g g g g g g g g g g g g
gindustries.
Solutions toj the Textbook Problems g g g g
1. They are: 1) ineffective financial management systems, 2) bank line ofj
g g g g g g g g g g
creditsconstantly borrowed to the limits, 3) poor estimating and/or job
g g g g g g g g g g
cost reporting,
g g
4) poor project management, and 5) no comprehensive business plan.
g g g g g g g g g
Downloaded by: Bookista | g g g g Want to earn $1.236
g g g
Distribution of this document is illegal g g g g g extra per year?
g g
