A contractor is constructing a new commercial building. The contract includes a clause to retain 7%...

 

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)?

Answer rating: 100% (QA)

Contractors Cash Outflow and Retainage Analysis a Contractors Cash Outflow We need to consider vario... View the full answer