Construction Accounting And Financial Management (4th Edition)
4th Edition
ISBN: 9780135232873
Author: Steven J. Peterson MBA PE
Publisher: PEARSON
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Chapter 12, Problem 12P
To determine
Ascertain the monthly cash flow, the total cash and the amount invested during the completion of the project by the company.
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Whispering Corp. enters into a contract with a customer to build an apartment building for $979,400. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $144,300 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $48,100 each week that completion is delayed. Whispering commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes:
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On April 1, based on historical experience, Romano estimated that there is a 75% chance that it will receive the quarterly bonus.
On May 5, Romano learned that, during March, there were two complaints from customers related to room cleanliness. Based on this new information, Romano revised its estimate downward to 40% that it would be entitled to receive the quarterly bonus.
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Infotech Bhd enters a contract on 1 January 2019 to produce software for a customer for RM7,000,000. Infotech Bhd receives RM2,000,000 from the customer upon contract signing and the balance at the completion of the contract. According to the
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Prepare the entries recorded by Infotech over the life of this contract. Assume that all payments are complete by the end of 2020
Chapter 12 Solutions
Construction Accounting And Financial Management (4th Edition)
Ch. 12 - Prob. 1DQCh. 12 - How does subcontracting out labor that would...Ch. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - How does the rate of progress on a project affect...Ch. 12 - How does retention affect the projects need for...Ch. 12 - Prob. 7DQCh. 12 - A construction company is negotiating on a...Ch. 12 - A construction company is negotiating on a...Ch. 12 - Prob. 10P
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