SOLUTION MANUAL
Construction Accounting and Financial Management,
4th Edition Steven J. Peterson
Chapters 1 - 18, Complete Newest Version
Construction Accounting and Financial Management,
ki* ki* ki* ki*
, CONTENTS
New to the Fourth Edition
ki* ki* ki* ki* 1
Chapter 1: Construction Financial Management
ki* ki* ki* ki* 2
Chapter 2: Construction Accounting Systems
ki* ki* ki* ki* 4
Chapter 3: Accounting Transactions
ki* ki* ki* 7
Chapter 4: More Construction Accounting
ki* ki* ki* ki* 23
Chapter 5: Depreciation
ki* ki* 34
Chapter 6: Analysis of Financial Statements
ki* ki* ki* ki* ki* 50
Chapter 7: Managing Costs
ki* ki* ki* 58
Chapter 8: Determining Labor Burden
ki* ki* ki* ki* 62
Chapter 9: Managing General Overhead Costs
ki* ki* ki* ki* ki* 65
Chapter 10: Setting Profit Margins for Bidding
ki* ki* ki* ki* ki* ki* 67
Chapter 11: Profit Center Analysis
ki* ki* ki* ki* 70
Chapter 12: Cash Flows For Construction Projects
ki* ki* ki* ki* ki* ki* 75
Chapter 13: Projecting Income Taxes
ki* ki* ki* ki* 87
Chapter 14: Cash Flows for a Construction Company
ki* ki* ki* ki* ki* ki* ki* 91
Chapter 15: Time Value of Money
ki* ki* ki* ki* ki* 93
Chapter 16: Financing a Company’s Financial Needs
ki* ki* ki* ki* ki* ki* 99
Chapter 17: Making Financial Decisions
ki* ki* ki* ki* 111
Chapter 18: Income Taxes and Financial Decisions
ki* ki* ki* ki* ki* ki* 130
Construction Accounting and Financial Management, ki* ki* ki* ki*
, iii
Construction Accounting and Financial Management,
ki* ki* ki* ki*
, New to the Fourth Edition ki* ki* ki* ki*
The major changes to the fourth edition include the following
ki* ki* ki* ki* ki* ki* ki* ki* ki*
The business failure rate for construction companies in Chapter 1 have
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
beenupdated.
ki* ki*
Sections on cost segregation and bonus depreciation have been added to Chapter 5.
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
The discussion of typical median ratios in Chapter 6 has been updated.
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
A section on the monitoring and controlling process has been added to Chapter 7.
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
A section on managing design-build costs has been added to Chapter 7.
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
The wages, social security, and Medicare costs were updated in Chapters
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
8, 9,and 14.
ki* ki* ki* ki*
A weekly cash flow problem has been added to Chapter 12.
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
The income tax regulations in Chapter 13 have been updated to
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
incorporateprovisions of The Tax Cuts and Jobs Act passed in
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
December 2017.
ki* ki*
The project cash flows used to develop an annual cash flow for a
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
construction company have been expanded to cover the entire project
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
(including work done inthe prior year) and the calculation of the
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
underbillings/overbillings has been included in Chapter 14.
ki* ki* ki* ki* ki* ki* ki*
The effects of taxes on decision has been updated in Chapter 18 to
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
incorporate theTax Cuts and Jobs Act.
ki* ki* ki* ki* ki* ki* ki*
The Instructor’s Manual includes a list of learning objectives, instructional hints,
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
suggested activities, and resources for each chapter. Files for the figures and tables
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
in the textbook are found on the instructor’s website. It is my hope that these
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
resources will make it easier for course instructors to teach the material in a
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
meaningful manner. Because the courses that use this textbook are quite diverse, it
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
is impossible to organize the chapters into one best order. Each instructor should
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
consider his or her individual program and determine which chapters need to be
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
taught and in what order.
ki* ki* ki* ki* ki*
Best wishes, ki*
Steven J. Peterson, MBA, PE ki* ki* ki* ki*
Construction Accounting and Financial Management,
4th Edition Steven J. Peterson
Chapters 1 - 18, Complete Newest Version
Construction Accounting and Financial Management,
ki* ki* ki* ki*
, CONTENTS
New to the Fourth Edition
ki* ki* ki* ki* 1
Chapter 1: Construction Financial Management
ki* ki* ki* ki* 2
Chapter 2: Construction Accounting Systems
ki* ki* ki* ki* 4
Chapter 3: Accounting Transactions
ki* ki* ki* 7
Chapter 4: More Construction Accounting
ki* ki* ki* ki* 23
Chapter 5: Depreciation
ki* ki* 34
Chapter 6: Analysis of Financial Statements
ki* ki* ki* ki* ki* 50
Chapter 7: Managing Costs
ki* ki* ki* 58
Chapter 8: Determining Labor Burden
ki* ki* ki* ki* 62
Chapter 9: Managing General Overhead Costs
ki* ki* ki* ki* ki* 65
Chapter 10: Setting Profit Margins for Bidding
ki* ki* ki* ki* ki* ki* 67
Chapter 11: Profit Center Analysis
ki* ki* ki* ki* 70
Chapter 12: Cash Flows For Construction Projects
ki* ki* ki* ki* ki* ki* 75
Chapter 13: Projecting Income Taxes
ki* ki* ki* ki* 87
Chapter 14: Cash Flows for a Construction Company
ki* ki* ki* ki* ki* ki* ki* 91
Chapter 15: Time Value of Money
ki* ki* ki* ki* ki* 93
Chapter 16: Financing a Company’s Financial Needs
ki* ki* ki* ki* ki* ki* 99
Chapter 17: Making Financial Decisions
ki* ki* ki* ki* 111
Chapter 18: Income Taxes and Financial Decisions
ki* ki* ki* ki* ki* ki* 130
Construction Accounting and Financial Management, ki* ki* ki* ki*
, iii
Construction Accounting and Financial Management,
ki* ki* ki* ki*
, New to the Fourth Edition ki* ki* ki* ki*
The major changes to the fourth edition include the following
ki* ki* ki* ki* ki* ki* ki* ki* ki*
The business failure rate for construction companies in Chapter 1 have
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
beenupdated.
ki* ki*
Sections on cost segregation and bonus depreciation have been added to Chapter 5.
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
The discussion of typical median ratios in Chapter 6 has been updated.
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
A section on the monitoring and controlling process has been added to Chapter 7.
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
A section on managing design-build costs has been added to Chapter 7.
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
The wages, social security, and Medicare costs were updated in Chapters
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
8, 9,and 14.
ki* ki* ki* ki*
A weekly cash flow problem has been added to Chapter 12.
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
The income tax regulations in Chapter 13 have been updated to
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
incorporateprovisions of The Tax Cuts and Jobs Act passed in
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
December 2017.
ki* ki*
The project cash flows used to develop an annual cash flow for a
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
construction company have been expanded to cover the entire project
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
(including work done inthe prior year) and the calculation of the
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
underbillings/overbillings has been included in Chapter 14.
ki* ki* ki* ki* ki* ki* ki*
The effects of taxes on decision has been updated in Chapter 18 to
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
incorporate theTax Cuts and Jobs Act.
ki* ki* ki* ki* ki* ki* ki*
The Instructor’s Manual includes a list of learning objectives, instructional hints,
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
suggested activities, and resources for each chapter. Files for the figures and tables
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
in the textbook are found on the instructor’s website. It is my hope that these
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
resources will make it easier for course instructors to teach the material in a
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
meaningful manner. Because the courses that use this textbook are quite diverse, it
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
is impossible to organize the chapters into one best order. Each instructor should
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
consider his or her individual program and determine which chapters need to be
ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki* ki*
taught and in what order.
ki* ki* ki* ki* ki*
Best wishes, ki*
Steven J. Peterson, MBA, PE ki* ki* ki* ki*
