SOLUTION MANUAL Construction Accounting and Financial Management, 4th Edition Steven J. Peterson 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
Newj toj thej Fourthj Edition 1

Chapterj 1:j Constructionj Financialj Management 2

Chapterj 2:j Constructionj Accountingj Systems 4

Chapterj 3:j Accountingj Transactions 7

Chapterj 4:j Morej Constructionj Accounting 23

Chapterj 5:j Depreciation 34

Chapterj 6:j Analysisj ofj Financialj Statements 50

Chapterj 7:j Managingj Costs 58

Chapterj 8:j Determiningj Laborj Burden 62

Chapterj 9:j Managingj Generalj Overheadj Costs 65

Chapterj 10:j Settingj Profitj Marginsj forj Bidding 67

Chapterj 11:j Profitj Centerj Analysis 70

Chapterj 12:j Cashj Flowsj Forj Constructionj Projects 75

Chapterj 13:j Projectingj Incomej Taxes 87

Chapterj 14:j Cashj Flowsj forj aj Constructionj Company 91

Chapterj 15:j Timej Valuej ofj Money 93

Chapterj 16:j Financingj aj Company’sj Financialj Needs 99

Chapterj 17:j Makingj Financialj Decisions 111

Chapterj 18:j Incomej Taxesj andj Financialj Decisions 130

, Newj toj thej Fourthj Edition
Thej majorj changesj toj thej fourthj editionj includej thej following
 Thej businessj failurej ratej forj constructionj companiesj inj Chapterj 1j havej
beenjupdated.
 Sectionsj onj costj segregationj andj bonusj depreciationj havej beenj addedj toj Chapterj 5.
 Thej discussionj ofj typicalj medianj ratiosj inj Chapterj 6j hasj beenj updated.
 Aj sectionj onj thej monitoringj andj controllingj processj hasj beenj addedj toj Chapterj 7.
 Aj sectionj onj managingj design-buildj costsj hasj beenj addedj toj Chapterj 7.
 Thej wages,j socialj security,j andj Medicarej costsj werej updatedj inj Chaptersj
8,j 9,jandj 14.
 Aj weeklyj cashj flowj problemj hasj beenj addedj toj Chapterj 12.
 Thej incomej taxj regulationsj inj Chapterj 13j havej beenj updatedj toj
incorporatejprovisionsj ofj Thej Taxj Cutsj andj Jobsj Actj passedj inj Decemberj
2017.
 Thej projectj cashj flowsj usedj toj developj anj annualj cashj flowj forj aj
constructionj companyj havej beenj expandedj toj coverj thej entirej projectj
(includingj workj donej injthej priorj year)j andj thej calculationj ofj thej
underbillings/overbillingsj hasj beenj includedj inj Chapterj 14.
 Thej effectsj ofj taxesj onj decisionj hasj beenj updatedj inj Chapterj 18j toj
incorporatej thejTaxj Cutsj andj Jobsj Act.
Thej Instructor’sj Manualj includesj aj listj ofj learningj objectives,j instructionalj hints,j
suggestedj activities,j andj resourcesj forj eachj chapter.j Filesj forj thej figuresj andj tablesj inj
thej textbookj arej foundj onj thej instructor’sj website.j Itj isj myj hopej thatj thesej
resourcesj willj makej itj easierj forj coursej instructorsj toj teachj thej materialj inj aj
meaningfulj manner.j Becausej thej coursesj thatj usej thisj textbookj arej quitej diverse,j itj
isj impossiblej toj organizej thej chaptersj intoj onej bestj order.j Eachj instructorj shouldj
considerj hisj orj herj individualj programj andj determinej whichj chaptersj needj toj bej
taughtj andj inj whatj order.
Bestj wishes,
Stevenj J.j Peterson,j MBA,j PE
Chapterj 1:j Constructionj Financialj Management

Learningj Objectives
Atj thej completionj ofj thisj chapterj thej studentj shouldj bej ablej to:
 Explainj whyj financialj managementj isj soj importantj toj aj constructionj company.

,  Explainj whyj financialj managementj isj differentj forj constructionj companiesj thanj
forjmostj otherj industries.
 Understandj thatj allj managerialj employeesj fromj thej ownerj toj thej crewj
forepersonjplayj aj rolej inj financialj managementj ofj aj constructionj company.


Instructionalj Hints
 Comparej aj constructionj companyj toj aj manufacturingj plant.j Emphasizej thej
differencesj betweenj aj constructionj companyj andj aj manufacturingj plant,j
particularly:j constructionj companiesj buildj uniquej productsj andj thej
equipmentj isjnotj usuallyj stationaryj atj singlej location.j Thesej arej thej reasonsj
aj constructionj companyj needsj aj jobj costj systemj andj anj equipmentj costj
system.


Activities
 Invitej aj financialj managerj (forj example,j anj accountantj orj generalj manager)j
fromj ajconstructionj companyj toj yourj classj toj discussj theirj rolej asj aj financialj
manager.
 Havej eachj studentj interviewj aj managementj employeej forj aj constructionj
company.jThej interviewsj shouldj includej owners,j projectj managers,j
superintendents,j andj forepersons.j Eachj studentj isj toj findj outj howj thej
employeej contributesj toj thej financialj managementj ofj thej company.j Discussj
theirj findingsj inj class.


Instructionj Resources
 Thej figuresj fromj thisj chapterj inj electronicj formatj andj PowerPointj slidesj
canj bejfoundj atj thej instructor’sj website.
 Dataj onj constructionj failuresj canj bej obtainedj fromj thej Suretyj Informationj
Office(www.sio.org).
j

 Currentj dataj onj constructionj companyj failuresj canj bej foundj atj
http://www.census.gov/ces/dataproducts/bds/data_firm.html.j Thej mostj usefulj
datajcomesj fromj reportsj thatj includej thej sectorj (e.g.,j Sector,j Firmj Agej byj
Sector,j andj Firmj Sizej byj Sector)j becausej constructionj canj bej separatedj fromj
otherj industries.
Solutionsj toj thej Textbookj Problems
1. Theyj are:j 1)j ineffectivej financialj managementj systems,j 2)j bankj linej ofj
creditsjconstantlyj borrowedj toj thej limits,j 3)j poorj estimatingj and/orj jobj
costj reporting,
4)j poorj projectj management,j andj 5)j noj comprehensivej businessj plan.