Construction Accounting

Transcription

1 Construction Accounting Steven M. Bragg

2 Chapter 1 Overview of the Construction Industry... 1 Learning Objectives... 1 Introduction... 1 Nature of the Construction Contractor... 2 Bonding Requirements... 2 The Bidding and Construction Process... 3 Types of Construction Contracts... 4 Fixed Fee Pricing... 4 Cost Plus Pricing... 4 Unit-Price Contract... 5 Construction Contract Modifiers... 5 Contract Changes... 6 Construction Industry Failure Issues... 6 Chapter Summary... 7 Review Questions... 8 Review Answers... 9 Chapter 2 The Construction Accounting System Learning Objectives Introduction Nature of a Construction Accounting System The Chart of Accounts The General Ledger The Work Breakdown Structure The Job Cost Ledger Job Cost Ledger Posting The Equipment Ledger Chapter Summary Review Questions Review Answers Chapter 3 Construction-Specific Accounting Learning Objectives Introduction Accounting Standard-Setting Organizations Types of Accounting Methodologies Cash Method of Accounting Accrual Method of Accounting Summary of Accounting Methodologies Unpriced Change Orders Contract Claims Contract Back Charges Costs Assigned to Jobs Labor Burden Equipment Cost Allocation Chapter Summary Review Questions Review Answers Chapter 4 Construction Transactions Learning Objectives Introduction Double Entry Accounting Journal Entries General Entries... 43

3 Office Rent Expense Other General Expenses Inventory Purchases Supplier Invoice Payments Client Cash Receipts Loan Acquisition Loan Payments Sale of Stock Entries Related to the Percentage of Completion Anticipated Losses on Contracts Job Costing Entries Invoice Charged to a Job Labor Charged to a Job Inventory Charged to a Job Client Billings Equipment Entries Equipment Rentals Equipment Repairs Equipment Charged to a Job Chapter Summary Review Questions Review Answers Chapter 5 Construction Financial Statements Learning Objectives Introduction The Balance Sheet The Income Statement The Statement of Cash Flows Financial Statement Disclosures Reporting Options Chapter Summary Review Questions Review Answers Chapter 6 Fixed Asset Accounting Learning Objectives Introduction What are Fixed Assets? Fixed Asset Classifications Accounting for Fixed Assets The Capitalization Limit The Base Unit The Initial Measurement of a Fixed Asset The Purpose of Depreciation Depreciation Concepts Accelerated Depreciation Sum-of-the-Years Digits Method Double-Declining Balance Method Straight-Line Method Units of Activity Method MACRS Depreciation The Depreciation of Land The Depreciation of Land Improvements Depreciation Accounting Entries Accumulated Depreciation Asset Derecognition Abandoned Assets ii

4 Asset Disposal Accounting Chapter Summary Review Questions Review Answers Chapter 7 Payables Accounting Learning Objectives Introduction Accounting for Accounts Payable Early Payment Discounts The Vendor Master File Vendor Master File Usage Supplier Naming Conventions The Payables Filing System Government Reporting The Form 1099-MISC Treatment of Incorrect Filings The Form W Chapter Summary Review Questions Review Answers Chapter 8 Debt Accounting Learning Objectives Introduction Basic Debt Accounting The Amortization Schedule Reconciling the Debt Account Participating Mortgage Loans Chapter Summary Review Questions Review Answers Chapter 9 Contingencies Learning Objectives Introduction Loss Contingencies Gain Contingencies Contingency Disclosures Chapter Summary Review Questions Review Answers Chapter 10 Lease Accounting Learning Objectives Introduction The Nature of a Lease Lease Types Initial Measurement Short-Term Leases Finance Leases Operating Leases Derecognition Chapter Summary Review Questions Review Answers iii

5 Chapter 11 Payroll Accounting Learning Objectives Introduction Employee Time Tracking Gross Pay Calculations Hourly Rate Plan Overtime Types of Payroll Taxes Social Security Tax Medicare Tax Unemployment Taxes Income Tax Withholdings Benefits and Other Deductions Net Pay Remitting Payroll Taxes Types of Tax Deposit Schedules Monthly Deposit Schedule Semiweekly Deposit Schedule Federal Unemployment Deposit Schedule Remittance Method The Form 941 Quarterly Federal Tax Return State Tax Remittances Payments to Employees The Payroll Register Form W Payroll Journal Entries Types of Payroll Journal Entries Primary Payroll Journal Entry Accrued Wages Manual Paycheck Entry Employee Advances Accrued Vacation Pay Tax Deposits Chapter Summary Review Questions Review Answers Chapter 12 Investments in Construction Joint Ventures Learning Objectives Introduction The Equity Method The Cost Method Consolidations Sales to a Joint Venture Chapter Summary Review Questions Review Answers Chapter 13 Construction Tax Issues Learning Objectives Introduction The Accounting Method to Use for Tax Reporting Application of the Cash Method Application of the Accrual Method Types of Costs Types of Accrual Methods Accrual Method Percentage of Completion Method iv

6 Exempt Percentage of Completion Method Completed Contract Method Chapter Summary Review Questions Review Answers Chapter 14 Construction Accounting Controls Learning Objectives Introduction Segregation of Duties Asset Tracking Access to Data Controls for Estimates and Bids Controls for Cost Plus Pricing Arrangements Controls for Fixed Fee Pricing Arrangements Subcontractor Controls Materials Controls Labor Controls Equipment Controls Job Closure Controls Percentage of Completion Controls Change Order Controls Billing Controls Budget Controls Financing Controls General and Administrative Controls Construction Fraud Chapter Summary Review Questions Review Answers Chapter 15 Job Analysis Learning Objectives Introduction Projected Cost and Variance Analysis Adjusting for the Timing of Billings Earned Value Management Schedule Performance Index Cost Performance Index Chapter Summary Review Questions Review Answers Chapter 16 Business Structures Learning Objectives Introduction Sole Proprietorship Partnership Corporation C Corporation S Corporation Limited Liability Company Chapter Summary Review Questions Review Answers Glossary Index v