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