SOLUTION MANUAL h
Construction Accounting and Financial Management,
h h h h
4th Edition Steven J. Peterson
h h h h
Chapters 1 - 18, Complete Newest Version
h h h h h h
Construction Accounting and Financial Management,
h h h h
, CONTENTS
New to the Fourth Edition
h h h h 1
Chapter 1: Construction FinancialManagement
h h h h 2
Chapter 2: Construction Accounting Systems
h h h h 4
Chapter 3: Accounting Transactions
h h h 7
Chapter 4: More Construction Accounting
h h h h 23
Chapter 5: Depreciation
h h 34
Chapter 6: Analysis of FinancialStatements
h h h h h 50
Chapter 7: Managing Costs
h h h 58
Chapter 8: Determining Labor Burden
h h h h 62
Chapter 9: Managing GeneralOverhead Costs
h h h h h 65
Chapter 10:Setting Profit Margins for Bidding
h h h h h h 67
Chapter 11: Profit Center Analysis
h h h h 70
Chapter 12: Cash Flows For Construction Projects
h h h h h h 75
Chapter 13: Projecting Income Taxes
h h h h 87
Chapter 14: CashFlows for a Construction Company
h h h h h h h 91
Chapter 15: Time Value ofMoney
h h h h h 93
Chapter 16: Financing a Company’s FinancialNeeds
h h h h h h 99
Chapter 17: Making Financial Decisions
h h h h 111
Chapter 18: Income Taxes and Financial Decisions
h h h h h h 130
Construction Accounting and Financial Management, h h h h
, iii
Construction Accounting and Financial Management,
h h h h
, New to the FourthEdition h h h h
The major changestothe fourthedition include the following
h h h h h h h h h
• The business failure rate forconstructioncompanies inChapter 1 have been
h h h h h h h h h h h
updated.
h
• Sections oncost segregationand bonus depreciationhave beenadded to Chapter 5.
h h h h h h h h h h h h
• The discussionoftypical medianratios inChapter 6 has beenupdated.
h h h h h h h h h h h
• Asectiononthe monitoring and controlling process has beenadded to Chapter 7.
h h h h h h h h h h h h h
• Asectionon managing design-build costs has been addedto Chapter 7.
h h h h h h h h h h h
• The wages, socialsecurity, and Medicare costs were updated inChapters8, 9,and
h h h h h h h h h h h h h
14. h
• Aweeklycash flow problemhas been added to Chapter 12.
h h h h h h h h h h
• The income taxregulations inChapter 13 have beenupdatedto incorporate
h h h h h h h h h h h
provisions ofThe Tax Cuts and Jobs Act passed in December 2017.
h h h h h h h h h h h h
• The project cash flows used to develop an annual cash flow for a construction
h h h h h h h h h h h h h
company have beenexpanded to coverthe entireproject (including work doneinthe
h h h h h h h h h h h h h h
prior year) and the calculation of the underbillings/overbillings has been included in
h h h h h h h h h h h h
Chapter 14.
h h
• The effects oftaxes ondecision has beenupdated inChapter 18to incorporatetheTax
h h h h h h h h h h h h h h h
Cuts and Jobs Act.
h h h h
The Instructor’s Manual includes a list of learning objectives, instructional hints, suggested
h h h h h h h h h h h
activities, and resources for each chapter. Files for the figures and tables in the textbook are
h h h h h h h h h h h h h h h h
found on the instructor’s website. It is my hope that these resources will make it easier for
h h h h h h h h h h h h h h h h h
course instructors to teach the material in a meaningful manner. Because the courses that
h h h h h h h h h h h h h h
use this textbook are quite diverse, it is impossible to organize the chapters into one best
h h h h h h h h h h h h h h h h
order. Each instructor should consider his or her individual program and determine which
h h h h h h h h h h h h h
chapters need to be taught and inwhat order.
h h h h h h h h h
Best wishes, h
StevenJ. Peterson, MBA, PE h h h h
Construction Accounting and Financial Management,
h h h h
4th Edition Steven J. Peterson
h h h h
Chapters 1 - 18, Complete Newest Version
h h h h h h
Construction Accounting and Financial Management,
h h h h
, CONTENTS
New to the Fourth Edition
h h h h 1
Chapter 1: Construction FinancialManagement
h h h h 2
Chapter 2: Construction Accounting Systems
h h h h 4
Chapter 3: Accounting Transactions
h h h 7
Chapter 4: More Construction Accounting
h h h h 23
Chapter 5: Depreciation
h h 34
Chapter 6: Analysis of FinancialStatements
h h h h h 50
Chapter 7: Managing Costs
h h h 58
Chapter 8: Determining Labor Burden
h h h h 62
Chapter 9: Managing GeneralOverhead Costs
h h h h h 65
Chapter 10:Setting Profit Margins for Bidding
h h h h h h 67
Chapter 11: Profit Center Analysis
h h h h 70
Chapter 12: Cash Flows For Construction Projects
h h h h h h 75
Chapter 13: Projecting Income Taxes
h h h h 87
Chapter 14: CashFlows for a Construction Company
h h h h h h h 91
Chapter 15: Time Value ofMoney
h h h h h 93
Chapter 16: Financing a Company’s FinancialNeeds
h h h h h h 99
Chapter 17: Making Financial Decisions
h h h h 111
Chapter 18: Income Taxes and Financial Decisions
h h h h h h 130
Construction Accounting and Financial Management, h h h h
, iii
Construction Accounting and Financial Management,
h h h h
, New to the FourthEdition h h h h
The major changestothe fourthedition include the following
h h h h h h h h h
• The business failure rate forconstructioncompanies inChapter 1 have been
h h h h h h h h h h h
updated.
h
• Sections oncost segregationand bonus depreciationhave beenadded to Chapter 5.
h h h h h h h h h h h h
• The discussionoftypical medianratios inChapter 6 has beenupdated.
h h h h h h h h h h h
• Asectiononthe monitoring and controlling process has beenadded to Chapter 7.
h h h h h h h h h h h h h
• Asectionon managing design-build costs has been addedto Chapter 7.
h h h h h h h h h h h
• The wages, socialsecurity, and Medicare costs were updated inChapters8, 9,and
h h h h h h h h h h h h h
14. h
• Aweeklycash flow problemhas been added to Chapter 12.
h h h h h h h h h h
• The income taxregulations inChapter 13 have beenupdatedto incorporate
h h h h h h h h h h h
provisions ofThe Tax Cuts and Jobs Act passed in December 2017.
h h h h h h h h h h h h
• The project cash flows used to develop an annual cash flow for a construction
h h h h h h h h h h h h h
company have beenexpanded to coverthe entireproject (including work doneinthe
h h h h h h h h h h h h h h
prior year) and the calculation of the underbillings/overbillings has been included in
h h h h h h h h h h h h
Chapter 14.
h h
• The effects oftaxes ondecision has beenupdated inChapter 18to incorporatetheTax
h h h h h h h h h h h h h h h
Cuts and Jobs Act.
h h h h
The Instructor’s Manual includes a list of learning objectives, instructional hints, suggested
h h h h h h h h h h h
activities, and resources for each chapter. Files for the figures and tables in the textbook are
h h h h h h h h h h h h h h h h
found on the instructor’s website. It is my hope that these resources will make it easier for
h h h h h h h h h h h h h h h h h
course instructors to teach the material in a meaningful manner. Because the courses that
h h h h h h h h h h h h h h
use this textbook are quite diverse, it is impossible to organize the chapters into one best
h h h h h h h h h h h h h h h h
order. Each instructor should consider his or her individual program and determine which
h h h h h h h h h h h h h
chapters need to be taught and inwhat order.
h h h h h h h h h
Best wishes, h
StevenJ. Peterson, MBA, PE h h h h
