Solutions Manual – Construction Accounting and Financial Management, 4th Edition – Steven J. Peterson – ISBN 9780135232873 (Full Chapters 1–18 Covered)

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Construction Accounting
and Financial Management,
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4th Edition
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SOLUTIONS
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MANUAL
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Steven J. Peterson
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Comprehensive Solutions Manual for Instructors
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and Students
(Full Chapters 1–18 Covered)
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9780135232873

© Steven J. Peterson. All rights reserved. Reproduction or distribution
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without permission is prohibited.




© MEDGEEK

, TABLE OF CONTENTS

Solutions Manual – Construction Accounting and Financial Management (4th Edition)
Author: Steven J. Peterson
ISBN: 9780135232873
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PART I: CONSTRUCTION ACCOUNTING

Chapter 1: Construction Financial Management
Chapter 2: Construction Accounting Systems
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Chapter 3: Accounting Transactions
Chapter 4: More Construction Accounting
Chapter 5: Depreciation
Chapter 6: Analysis of Financial Statements

PART II: COST MANAGEMENT
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Chapter 7: Managing Costs
Chapter 8: Determining Labor Burden
Chapter 9: Managing General Overhead Costs
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Chapter 10: Setting Profit Margins for Bidding
Chapter 11: Profit Center Analysis

PART III: CASH FLOW AND TAXES
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Chapter 12: Cash Flows for Construction Projects
Chapter 13: Projecting Income Taxes
Chapter 14: Cash Flows for Construction Companies

PART IV: FINANCIAL MANAGEMENT AND DECISION MAKING
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Chapter 15: Time Value of Money
Chapter 16: Financing a Company's Financial Needs
Chapter 17: Tools for Making Financial Decisions
Chapter 18: Income Taxes and Financial Decisions
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, Chapter 1: Construction Financial Management
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LearningJObjectives
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AtJtheJcompletionJofJthisJchapterJtheJstudentJshouldJbeJableJto:
 ExplainJwhyJfinancialJmanagementJisJsoJimportantJtoJaJconstructionJcompany.
 ExplainJwhyJfinancialJmanagementJ isJdifferentJforJconstructionJcompaniesJthanJforJ
mostJotherJindustries.
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 UnderstandJthatJallJmanagerialJemployeesJfromJtheJownerJtoJtheJcrewJforeperso
nJplayJaJroleJinJfinancialJmanagementJofJaJconstructionJcompany.


InstructionalJHints
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 CompareJaJconstructionJcompanyJtoJaJmanufacturingJplant.JEmphasizeJtheJdiffe
rencesJbetweenJaJconstructionJcompanyJandJaJmanufacturingJplant,Jparticularly
:JconstructionJcompaniesJbuildJuniqueJproductsJandJtheJequipmentJisJnotJusuallyJ
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stationaryJatJsingleJlocation.JTheseJareJtheJreasonsJaJconstructionJcompanyJnee
dsJaJjobJcostJsystemJandJanJequipmentJcostJsystem.


Activities
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 InviteJaJfinancialJmanagerJ(forJexample,JanJaccountantJorJgeneralJmanager)JfromJaJ
constructionJcompanyJtoJyourJclassJtoJdiscussJtheirJroleJasJaJ financialJmanager.
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.JTheJinterviewsJshouldJincludeJowners,JprojectJmanagers,Jsuperintendents,JandJfo
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repersons.JEachJstudentJisJtoJfindJoutJhowJtheJemployeeJcontributesJtoJtheJfinanci
alJmanagementJofJtheJcompany.JDiscussJtheirJ findingsJinJclass.


InstructionJResources
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 TheJfiguresJfromJthisJchapterJinJelectronicJformatJandJPowerPointJslidesJcanJbeJf
oundJatJtheJinstructor’sJwebsite.
 DataJonJconstructionJfailuresJcanJbeJobtainedJfromJtheJ SuretyJInformationJOfficeJ(
www.sio.org).
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 CurrentJdataJonJconstructionJcompanyJfailuresJcanJbeJfoundJatJhttp://www.censu
s.gov/ces/dataproducts/bds/data_firm.html.JTheJmostJusefulJdataJcomesJfromJre
portsJthatJincludeJtheJsectorJ(e.g.,JSector,JFirmJAgeJbyJSector,JandJFirmJSizeJbyJSect
or)JbecauseJconstructionJcanJbeJseparatedJfromJotherJindustries.

, SolutionsJtoJtheJTextbookJProblems
1. TheyJare:J1)JineffectiveJfinancialJmanagementJsystems,J2)JbankJlineJofJcreditsJc
onstantlyJborrowedJtoJtheJlimits,J3)JpoorJestimatingJand/orJjobJcostJreporting,
4)JpoorJprojectJmanagement,JandJ5)JnoJcomprehensiveJbusinessJplan.
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2. AnyoneJwhoJcontrolsJfinancialJresourcesJ(cash,Jmaterials,Jlabor,JandJequipment)Jincl
uding:Jowners,JgeneralJmanagers,JprojectJmanagers,Jestimators,Jsuperintendents,Ja
ndJcrewJ forepersons.
3. TheJwayJconstructionJcompaniesJdoJbusinessJisJveryJdifferentJthanJmostJcompanies.JT
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heJreasonsJforJthisJinclude:J1)JforJmanyJconstructionJcompanies,JtheirJentireJproductJc
onsistsJofJoneJofJaJkindJconstructionJprojects;J2)JtheirJprojectsJoccursJatJdifferentJlocat
ionsJeachJtime;J3)JtheyJreceiveJprogressJpaymentsJfromJwhichJretentionJisJwithheld;Ja
ndJ4)JtheyJrelyJheavilyJonJsubcontractorsJtoJperformJtheJwork.
4. AccountingJforJfinancialJresourcesJinclude:J1)JtrackingJprojectJandJgeneralJoverheadJc
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osts,J2)JensuringJthatJaJproperJconstructionJaccountingJsystemJhasJbeenJsetJupJandJisJo
peratingJproperly,J3)JtrackingJcommittedJcostsJandJprojectingJtheJprojectJcostsJatJco
mpletion,J4)JcalculatingJunderJandJoverJbillings,J5)JpreparingJfinancialJstatements,Jand
J6)JmanagingJtheJcompany’sJfinancesJsoJthatJtheJfinancialJratiosJareJinJlineJwithJtheJre
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stJofJtheJ industry.
5. ManagingJcostsJandJprofitsJinclude:J1)JcontrollingJprojectJcosts,J2)JmonitoringJandJpr
ojectingJprofitability,J3)JsettingJandJmanagingJlaborJburdenJmarkups,J4)JmanagingJov
erhead,J5)JsettingJprofitJmargins,JandJ6)JmonitorJtheJprofitabilityJofJindividualJcusto
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mers.
6. ManagingJcashJflowsJinclude:J1)JmatchingJtheJuseJofJsubcontractorJandJin-
houseJlaborJtoJavailableJcash,J2)JmakingJsureJthatJsufficientJcashJisJavailableJtoJtak
eJonJadditionalJprojects,J3)JpreparingJincomeJtaxJprojections,J4)JpreparingJannualJ
cashJflowJprojections,JandJ5)JarrangingJforJfinancing.
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7. ConstructionJmanagersJmustJselectJwhereJtoJinvestJtheJcompany’sJresourcesJan
dJselectJtheJmostJ economicalJconstructionJequipmentJtoJuse.
8. TheJanswerJtoJthisJquestionJwillJvaryJfromJstudentJtoJstudent.
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