SOLUTION MANUAL
Construction Accounting and Financial Manage̦me̦nt,
4th Edition Ste̦ ve̦ n J. Pe̦ te̦ rson
Chapte̦ rs 1 - 18, Comple̦ te̦ Ne̦ we̦ st Ve̦rsion
ConstructionJAccountingJandJFinancialJManage̦ me̦ nt,
, CONTENTS
Ne̦ wJtoJthe̦ JFourthJEdition 1
Chapte̦ rJ1:JConstructionJFinancialJManage̦ me̦ nt 2
Chapte̦ rJ2:JConstructionJAccountingJSyste̦ ms 4
Chapte̦ rJ3:JAccountingJTransactions 7
Chapte̦ rJ4:JMore̦ JConstructionJAccounting 23
Chapte̦ rJ5:JDe̦ pre̦ ciation 34
Chapte̦ rJ6:JAnalysisJofJFinancialJState̦ me̦ nts 50
Chapte̦ rJ7:JManagingJCosts 58
Chapte̦ rJ8:JDe̦ te̦ rminingJLaborJBurde̦ n 62
Chapte̦ rJ9:JManagingJGe̦ ne̦ ralJOve̦ rhe̦ adJCosts 65
Chapte̦ rJ10:JSe̦ ttingJProfitJMarginsJforJBidding 67
Chapte̦ rJ11:JProfitJCe̦ nte̦ rJAnalysis 70
Chapte̦ rJ12:JCashJFlowsJForJConstructionJProje̦ cts 75
Chapte̦ rJ13:JProje̦ ctingJIncome̦ JTaxe̦ s 87
Chapte̦ rJ14:JCashJFlowsJforJaJConstructionJCompany 91
Chapte̦ rJ15:JTime̦ JValue̦ JofJMone̦ y 93
Chapte̦ rJ16:JFinancingJaJCompany’sJFinancialJNe̦ e̦ds 99
Chapte̦ rJ17:JMakingJFinancialJDe̦ cisions 111
Chapte̦ rJ18:JIncome̦ JTaxe̦ sJandJFinancialJDe̦ cisions 130
ConstructionJAccountingJandJFinancialJManage̦ me̦ nt,
, iii
ConstructionJAccountingJandJFinancialJManage̦ me̦ nt,
, Ne̦ w to the̦ Fourth Edition
J J J J
The̦ JmajorJchange̦ sJtoJthe̦ JfourthJe̦ ditionJinclude̦ Jthe̦ Jfollowing
The̦ Jbusine̦ ssJfailure̦ Jrate̦ JforJconstructionJcompanie̦ sJinJChapte̦ rJ1Jhave̦ Jbe̦ e̦nJ
update̦ d.
Se̦ ctionsJonJcostJse̦ gre̦ gationJandJbonusJde̦ pre̦ ciationJhave̦ Jbe̦ e̦nJadde̦ dJtoJChapte̦ rJ5.
The̦ JdiscussionJofJtypicalJme̦ dianJratiosJinJChapte̦ rJ6JhasJbe̦ e̦nJupdate̦ d.
AJse̦ ctionJonJthe̦ JmonitoringJandJcontrollingJproce̦ ssJhasJbe̦ e̦nJadde̦ dJtoJChapte̦ rJ7.
AJse̦ ctionJonJmanagingJde̦ sign-buildJcostsJhasJbe̦ e̦nJadde̦ dJtoJChapte̦ rJ7.
The̦ Jwage̦ s,JsocialJse̦ curity,JandJMe̦ dicare̦ JcostsJwe̦ re̦ Jupdate̦ dJinJChapte̦ rsJ8,J9,Ja
ndJ14.
AJwe̦ e̦klyJcashJflowJproble̦ mJhasJbe̦ e̦nJadde̦ dJtoJChapte̦ rJ12.
The̦ Jincome̦ JtaxJre̦ gulationsJinJChapte̦ rJ13Jhave̦ Jbe̦ e̦nJupdate̦ dJtoJincorporate̦ J
provisionsJofJThe̦ JTaxJCutsJandJJobsJActJpasse̦ dJinJDe̦ ce̦ mbe̦ rJ2017.
The̦ Jproje̦ ctJcashJflowsJuse̦ dJtoJde̦ ve̦ lopJanJannualJcashJflowJforJaJconstructionJco
mpanyJhave̦ Jbe̦ e̦nJe̦ xpande̦ dJtoJcove̦ rJthe̦ Je̦ ntire̦ Jproje̦ ctJ(includingJworkJdone̦ Ji
nJth
e̦ JpriorJye̦ ar)JandJthe̦ JcalculationJofJthe̦ Junde̦ rbillings/ove̦ rbillingsJhasJbe̦ e̦nJinclu
d e̦ dJinJChapte̦ rJ14.
The̦ Je̦ ffe̦ ctsJofJtaxe̦ sJonJde̦ cisionJhasJbe̦ e̦nJupdate̦ dJinJChapte̦ rJ18JtoJincorporate̦ Jthe̦ J
TaxJCutsJandJJobsJAct.
The̦ JInstructor’sJManualJinclude̦ sJaJlistJofJle̦ arningJobje̦ ctive̦ s,JinstructionalJhints,Jsugge̦ ste̦
dJactivitie̦ s,JandJre̦ source̦ sJforJe̦ achJchapte̦ r.JFile̦ sJforJthe̦ Jfigure̦ sJandJtable̦ sJinJthe̦ Jte̦ xtbo
okJ
are̦ JfoundJonJthe̦ Jinstructor’sJwe̦ bsite̦ .JItJisJmyJhope̦ JthatJthe̦ se̦ Jre̦ source̦ sJwillJmake̦ JitJe̦ asi
e̦ rJ
forJcourse̦ JinstructorsJtoJte̦ achJthe̦ Jmate̦ rialJinJaJme̦ aningfulJmanne̦ r.JBe̦ cause̦ Jthe̦ Jcourse̦
sJt
hatJuse̦ JthisJte̦ xtbookJare̦ Jquite̦ Jdive̦ rse̦ ,JitJisJimpossible̦ JtoJorganize̦ Jthe̦ Jchapte̦ rsJintoJone̦ J
b
e̦ stJorde̦ r.JEachJinstructorJshouldJconside̦ rJhisJorJhe̦ rJindividualJprogramJandJde̦ te̦ rmine̦ Jw
hi chJchapte̦ rsJne̦ e̦dJtoJbe̦ JtaughtJandJinJwhatJorde̦ r.
Be̦ stJwishe̦ s,
Ste̦ ve̦ nJJ.JPe̦ te̦ rson,JMBA,JPE
Construction Accounting and Financial Manage̦me̦nt,
4th Edition Ste̦ ve̦ n J. Pe̦ te̦ rson
Chapte̦ rs 1 - 18, Comple̦ te̦ Ne̦ we̦ st Ve̦rsion
ConstructionJAccountingJandJFinancialJManage̦ me̦ nt,
, CONTENTS
Ne̦ wJtoJthe̦ JFourthJEdition 1
Chapte̦ rJ1:JConstructionJFinancialJManage̦ me̦ nt 2
Chapte̦ rJ2:JConstructionJAccountingJSyste̦ ms 4
Chapte̦ rJ3:JAccountingJTransactions 7
Chapte̦ rJ4:JMore̦ JConstructionJAccounting 23
Chapte̦ rJ5:JDe̦ pre̦ ciation 34
Chapte̦ rJ6:JAnalysisJofJFinancialJState̦ me̦ nts 50
Chapte̦ rJ7:JManagingJCosts 58
Chapte̦ rJ8:JDe̦ te̦ rminingJLaborJBurde̦ n 62
Chapte̦ rJ9:JManagingJGe̦ ne̦ ralJOve̦ rhe̦ adJCosts 65
Chapte̦ rJ10:JSe̦ ttingJProfitJMarginsJforJBidding 67
Chapte̦ rJ11:JProfitJCe̦ nte̦ rJAnalysis 70
Chapte̦ rJ12:JCashJFlowsJForJConstructionJProje̦ cts 75
Chapte̦ rJ13:JProje̦ ctingJIncome̦ JTaxe̦ s 87
Chapte̦ rJ14:JCashJFlowsJforJaJConstructionJCompany 91
Chapte̦ rJ15:JTime̦ JValue̦ JofJMone̦ y 93
Chapte̦ rJ16:JFinancingJaJCompany’sJFinancialJNe̦ e̦ds 99
Chapte̦ rJ17:JMakingJFinancialJDe̦ cisions 111
Chapte̦ rJ18:JIncome̦ JTaxe̦ sJandJFinancialJDe̦ cisions 130
ConstructionJAccountingJandJFinancialJManage̦ me̦ nt,
, iii
ConstructionJAccountingJandJFinancialJManage̦ me̦ nt,
, Ne̦ w to the̦ Fourth Edition
J J J J
The̦ JmajorJchange̦ sJtoJthe̦ JfourthJe̦ ditionJinclude̦ Jthe̦ Jfollowing
The̦ Jbusine̦ ssJfailure̦ Jrate̦ JforJconstructionJcompanie̦ sJinJChapte̦ rJ1Jhave̦ Jbe̦ e̦nJ
update̦ d.
Se̦ ctionsJonJcostJse̦ gre̦ gationJandJbonusJde̦ pre̦ ciationJhave̦ Jbe̦ e̦nJadde̦ dJtoJChapte̦ rJ5.
The̦ JdiscussionJofJtypicalJme̦ dianJratiosJinJChapte̦ rJ6JhasJbe̦ e̦nJupdate̦ d.
AJse̦ ctionJonJthe̦ JmonitoringJandJcontrollingJproce̦ ssJhasJbe̦ e̦nJadde̦ dJtoJChapte̦ rJ7.
AJse̦ ctionJonJmanagingJde̦ sign-buildJcostsJhasJbe̦ e̦nJadde̦ dJtoJChapte̦ rJ7.
The̦ Jwage̦ s,JsocialJse̦ curity,JandJMe̦ dicare̦ JcostsJwe̦ re̦ Jupdate̦ dJinJChapte̦ rsJ8,J9,Ja
ndJ14.
AJwe̦ e̦klyJcashJflowJproble̦ mJhasJbe̦ e̦nJadde̦ dJtoJChapte̦ rJ12.
The̦ Jincome̦ JtaxJre̦ gulationsJinJChapte̦ rJ13Jhave̦ Jbe̦ e̦nJupdate̦ dJtoJincorporate̦ J
provisionsJofJThe̦ JTaxJCutsJandJJobsJActJpasse̦ dJinJDe̦ ce̦ mbe̦ rJ2017.
The̦ Jproje̦ ctJcashJflowsJuse̦ dJtoJde̦ ve̦ lopJanJannualJcashJflowJforJaJconstructionJco
mpanyJhave̦ Jbe̦ e̦nJe̦ xpande̦ dJtoJcove̦ rJthe̦ Je̦ ntire̦ Jproje̦ ctJ(includingJworkJdone̦ Ji
nJth
e̦ JpriorJye̦ ar)JandJthe̦ JcalculationJofJthe̦ Junde̦ rbillings/ove̦ rbillingsJhasJbe̦ e̦nJinclu
d e̦ dJinJChapte̦ rJ14.
The̦ Je̦ ffe̦ ctsJofJtaxe̦ sJonJde̦ cisionJhasJbe̦ e̦nJupdate̦ dJinJChapte̦ rJ18JtoJincorporate̦ Jthe̦ J
TaxJCutsJandJJobsJAct.
The̦ JInstructor’sJManualJinclude̦ sJaJlistJofJle̦ arningJobje̦ ctive̦ s,JinstructionalJhints,Jsugge̦ ste̦
dJactivitie̦ s,JandJre̦ source̦ sJforJe̦ achJchapte̦ r.JFile̦ sJforJthe̦ Jfigure̦ sJandJtable̦ sJinJthe̦ Jte̦ xtbo
okJ
are̦ JfoundJonJthe̦ Jinstructor’sJwe̦ bsite̦ .JItJisJmyJhope̦ JthatJthe̦ se̦ Jre̦ source̦ sJwillJmake̦ JitJe̦ asi
e̦ rJ
forJcourse̦ JinstructorsJtoJte̦ achJthe̦ Jmate̦ rialJinJaJme̦ aningfulJmanne̦ r.JBe̦ cause̦ Jthe̦ Jcourse̦
sJt
hatJuse̦ JthisJte̦ xtbookJare̦ Jquite̦ Jdive̦ rse̦ ,JitJisJimpossible̦ JtoJorganize̦ Jthe̦ Jchapte̦ rsJintoJone̦ J
b
e̦ stJorde̦ r.JEachJinstructorJshouldJconside̦ rJhisJorJhe̦ rJindividualJprogramJandJde̦ te̦ rmine̦ Jw
hi chJchapte̦ rsJne̦ e̦dJtoJbe̦ JtaughtJandJinJwhatJorde̦ r.
Be̦ stJwishe̦ s,
Ste̦ ve̦ nJJ.JPe̦ te̦ rson,JMBA,JPE
