Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A construction project is carried out by a general contractor with the following descriptions: Project Duration: 3 months (Start: May 1st; End: July 31st) Contract

A construction project is carried out by a general contractor with the following descriptions:

  • Project Duration: 3 months (Start: May 1st; End: July 31st)
  • Contract Amount: 28,000+33,000+53,000+43,000+67,000+72,000+35,000+101,000+152,000
  • Budget Amount: 101,000+202,000+302,000
  • Contract Terms and Conditions
    • Materials: The construction company pays material suppliers in full when it receives payment from the owner. On the last day of each month the construction company may bill the owner for the work completed during the month. The owner pays the monthly bills one month after they are received.
    • Labor: The construction company pays for labor on the 25th of each month.
    • Subcontractor: The construction company pays subcontractors when it receives payment from the owner but withholds 5% from the subcontractors payment. Final payment will include payment of the retention.
    • Between the contractor and the owner: On the last day of each month the construction company may bill the owner for the work completed during the month. The owner pays the monthly bills one month after they are received. The owner withholds 5% from the construction company's payment. Final payment will include payment of the retention.
  • Cost-loaded schedule and billing schedule to the owner
Month May June July
Cost-Loaded Schedule Materials 28,000 33,000 53,000
Labor 43,000 67,000 72,000
Subcontractor 35,000 101,000 152,000
Bill to Owner 101,000 202,000 302,000

What is the amount of cash to maintain a positive cash flow in this project?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Credentialing Audits Tools For Compliance And Reduced Liability

Authors: CPMSM Vicki L. Searcy

1st Edition

1578398584, 978-1578398584

More Books

Students also viewed these Accounting questions

Question

List the advantages and disadvantages of the pay programs. page 505

Answered: 1 week ago