Construction Accounting and Financial Management, 4th Edition Solution Manual by Steven J. Peterson, Verified Chapters 1 - 18, Complete Newest Version

SOLUTION MANUAL

Construction Accounting and Financial Management,

4th Edition Steven J. Peterson

Chapters 1 - 18, Complete Newest Version

, CONTENTS
New to the Fourth Edition
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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 Transactions
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Chapter 4: More Construction Accounting
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Chapter 5: Depreciation
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Chapter 6: Analysis of Financial Statements
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Chapter 7: Managing Costs
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Chapter 8: Determining Labor Burden
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Chapter 9: Managing General Overhead Costs
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Chapter 10: Setting Profit Margins for Bidding
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Chapter 11: Profit Center Analysis
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Chapter 12: Cash Flows For Construction Projects
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Chapter 13: Projecting Income Taxes
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Chapter 14: Cash Flows for a Construction Company
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Chapter 15: Time Value of Money
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Chapter 16: Financing a Company’s Financial Needs
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Chapter 17: Making Financial Decisions
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Chapter 18: Income Taxes and Financial Decisions
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iii

, New to the Fourth Edition ng ng ng ng




The major changes to the fourth edition include the following
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• The business failure rate for construction companies in Chapter 1
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have beenupdated.
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• Sections on cost segregation and bonus depreciation have been added to Cha
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pter 5. ng




• 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 Chapt
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er 7. ng




• 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 Ch
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apters 8, 9,and 14. ng ng n
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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 to i
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ncorporateprovisions of The Tax Cuts and Jobs Act passed in De n
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cember 2017. ng




• The project cash flows used to develop an annual cash flow for a const
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ruction company have been expanded to cover the entire project (inclu
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ding work done inthe prior year) and the calculation of the underbilli
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ngs/overbillings has been included in Chapter 14. ng ng ng ng ng ng




• The effects of taxes on decision has been updated in Chapter 18 to inco
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rporate theTax Cuts and Jobs Act. ng n
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The Instructor’s Manual includes a list of learning objectives, instructional hi
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nts, suggested activities, and resources for each chapter. Files for the figures
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and tables in the textbook are found on the instructor’s website. It is my hope
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that these resources will make it easier for course instructors to teach the m
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aterial in a meaningful manner. Because the courses that use this textbook a
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re quite diverse, it is impossible to organize the chapters into one best order.
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Each instructor should consider his or her individual program and determine
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which chapters need to be taught and in what order.
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Best wishes, ng




Steven J. Peterson, MBA, PE ng ng ng ng

, Chapter 1: Construction Financial Management ng ng ng ng




Learning Objectives ng




At the completion of this chapter the student should be able to:
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• Explain why financial management is so important to a construction compan
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y.
• Explain why financial management is different for construction compan
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ies than formost other industries.
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• Understand that all managerial employees from the owner to the crew ng ng ng ng ng ng ng ng ng ng



forepersonplay a role in financial management of a construction com
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pany.


Instructional Hints ng




• Compare a construction company to a manufacturing plant. Emphasi
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ze the differences between a construction company and a manufactur
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ing plant, particularly: construction companies build unique products
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and the equipment isnot usually stationary at single location. These
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are the reasons a construction company needs a job cost system and
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an equipment cost system.
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Activities
• Invite a financial manager (for example, an accountant or general man
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ager) from aconstruction company to your class to discuss their role as
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a financial manager.
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• Have each student interview a management employee for a constructio
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n company.The interviews should include owners, project managers, su
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perintendents, and forepersons. Each student is to find out how the em ng ng ng ng ng ng ng ng ng ng ng



ployee contributes to the financial management of the company. Discus
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s their findings in class.
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Instruction Resources ng




• The figures from this chapter in electronic format and PowerPoint sl
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ides can befound at the instructor’s website.
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• Data on construction failures can be obtained from the Surety Inform
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ation Office(www.sio.org). ng n
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• Current data on construction company failures can be found at http://
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www.census.gov/ces/dataproducts/bds/data_firm.html. The most useful ng ng ng n