A contractor is constructing a new commercial building. The contract includes a clause to retain 7%...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A contractor is constructing a new commercial building. The contract includes a clause to retain 7% of the amounts due to the contractor in each progress payment. In addition, the owner/architect have one month, upon receiving an invoice, to review, approve, and authorize payment. Concrete work worth $50,000 (excluding profit) is completed during the second month, of which $30,000 is subcontracted. (2 points each). a. Determine the contractor's cash outflow (expenses) during the second month: b. What portion of the amount retained from the bill submitted at the end of the second month is attributed to the concrete work? c. When will the contractor collect the amount retained in part (b)? A contractor is constructing a new commercial building. The contract includes a clause to retain 7% of the amounts due to the contractor in each progress payment. In addition, the owner/architect have one month, upon receiving an invoice, to review, approve, and authorize payment. Concrete work worth $50,000 (excluding profit) is completed during the second month, of which $30,000 is subcontracted. (2 points each). a. Determine the contractor's cash outflow (expenses) during the second month: b. What portion of the amount retained from the bill submitted at the end of the second month is attributed to the concrete work? c. When will the contractor collect the amount retained in part (b)?
Expert Answer:
Answer rating: 100% (QA)
Contractors Cash Outflow and Retainage Analysis a Contractors Cash Outflow We need to consider vario... View the full answer
Related Book For
Principles of Auditing and Other Assurance Services
ISBN: 978-0078025617
19th edition
Authors: Ray Whittington, Kurt Pany
Posted Date:
Students also viewed these accounting questions
-
During 2022, Finial changed employers in the middle of the year and earned $75,000 (all of which was subject to FICA) from each job. The second employer withheld too much and Finial must get a refund...
-
During 2022, Finial changed employers in the middle of the year and earned $75,000 (all of which was subject to FICA) from each job. The second employer withheld too much and Finial must get a refund...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
A small company has $4,500,000 in (annual) revenue, spends 57% of its revenues on purchases, and has a net profit margin of 11.75%. They would like to increase their profits and they are looking at...
-
On January 10, 2017, Kato Kreations sold merchandise on account to Lechner & Associates for $15,600, n/30. On February 9, Lechner gave Kato a 10% promissory note in settlement of this account....
-
Americans snooze more on the weekends, according to a poll of 1506 adults for the National Sleep Foundation and reported in a USA Today Snapshot during April 2005. Two independent random samples were...
-
With the help of the explicit expression for the semi-group of BM killed at time \(T_{0}(3.1 .9)\), deduce the semi-group of \(\mathrm{BES}^{3}\) from formula (6.1.8). \[\begin{equation*}...
-
At the beginning of 2016, Air Asia purchased a used airplane at a cost of $40,000,000. Air Asia expects the plane to remain useful for eight years (5,000,000 miles) and to have a residual value of...
-
A company sells merchandise on November 2 at a $4,000 invoice price with terms of 2/10, n/30. The goods cost $2,000. The company uses the net method to record invoices. The customer pays the balance...
-
How would you go about creating an orientation policy for new officers of the Public Service?
-
Toronto Raptors is a basketball sports organization, selling tickets in advance of basketball games. Toronto Raptors prepares adjusting entries monthly. Additional information available on December...
-
Congratulations! A stock of which you own 100 shares has just split three for two. Its market price before the split was $30 per share. Now discuss what you would expect to happen with this stock and...
-
Solve x+b A- x+c + dx
-
Find and fix the error in the below Program import java . io . BufferedReader; import java . io . IOException; import java . io . InputStreamReader; public class Wonderland { static Actions actions;...
-
Fifteen years ago a couple purchased a house for $150,000.00 by paying a 20% down payment and financing the remaining balance with a 30-year mortgage at 7.22% compounded monthly. (a) Find the monthly...
-
Silver has a density of 10.5 g / cm3. You want to buy a pure silver ring, for this the jeweler weighs the ring (18 g); and then immerses it in a measuring cylinder with water and it is observed that...
-
The swap spread is the difference between the swap rate and the equivalent-maturity Treasury bond yield. Explain why a widening swap spread may be a signal of deteriorating economic conditions. Plot...
-
Should the working trial balance prepared by the auditors include revenue and expense accounts if the balances of these accounts for the audit year have been closed into retained earnings prior to...
-
Comment on the following: If the financial statements contain an immaterial departure from generally accepted accounting principles, the auditors issue a qualified opinion; if the financial...
-
Most auditors are interested in performing as many phases of an audit as possible in advance of the balance sheet date. The verification of accounts payable, however, generally is regarded as...
-
What role does the HAL play in the platform?
-
If your logic analyzer is capable of on-the-fly disassembly, use it to display bus activity in the form of instructions, rather than simply 1s and 0s.
-
Draw UML state diagrams for device 1 and device 2 in a four-cycle handshake.
Study smarter with the SolutionInn App