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FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Questionn. Answer the following questions with regard to the AIA A201TM - General Conditions of the Contract for Construction, a required reading item for Module 4: a). An abandoned well was found in the area of a proposed footing, and the well cap was clearly visible. The contractor claimed additional costs for structural fill. Should the architect approve his claim? b). Does the owner have the right to subcontract out portions of the work directly? c). The building official pointed out that the lack of fire alarms in the project violated local building codes. The owner went after the electrical contractor for negligence in reviewing the drawings. Should the electrical contractor be responsible for the delay and additional cost in fixing this problem? d). How can the contractor check on the owner's financial strength? e). In the contract, the stipulated allowance for the carpet is $10,000. The contractor spent $9,500 (delivery and tax included) on purchasing the carpet chosen by the owner and $1,000 on installation. This project specifies 10% for overhead and profit markup for change orders. How much adjustment is the contractor entitled to for this allowance item? f). Why is it important to identify the owner's representative in writing? g). The contractor encountered materially different site conditions during excavation. In order to make a claim for additional costs, when does he have to file the claim? h). Does the owner have the right to reject a general contractor's (GC's) subcontractor who is reasonably capable of performing the work?
Transcribed Image Text:Questionn. Answer the following questions with regard to the AIA A201TM - General Conditions of the Contract for Construction, a required reading item for Module 4: a). An abandoned well was found in the area of a proposed footing, and the well cap was clearly visible. The contractor claimed additional costs for structural fill. Should the architect approve his claim? b). Does the owner have the right to subcontract out portions of the work directly? c). The building official pointed out that the lack of fire alarms in the project violated local building codes. The owner went after the electrical contractor for negligence in reviewing the drawings. Should the electrical contractor be responsible for the delay and additional cost in fixing this problem? d). How can the contractor check on the owner's financial strength? e). In the contract, the stipulated allowance for the carpet is $10,000. The contractor spent $9,500 (delivery and tax included) on purchasing the carpet chosen by the owner and $1,000 on installation. This project specifies 10% for overhead and profit markup for change orders. How much adjustment is the contractor entitled to for this allowance item? f). Why is it important to identify the owner's representative in writing? g). The contractor encountered materially different site conditions during excavation. In order to make a claim for additional costs, when does he have to file the claim? h). Does the owner have the right to reject a general contractor's (GC's) subcontractor who is reasonably capable of performing the work?
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