A monthly payment application requests $186,000 of earned work. If retainage is 5%, what net payment should be forecast before other deductions?
Correct Answer
C) $176,700
Retainage is withheld from the earned amount.
Why This Is the Correct Answer
Retainage is withheld from the earned amount.
Why the Other Options Are Wrong
Option A: $174,300
$174,300 is below the supported result for retainage cash forecast; it likely uses the wrong base, period, or account bucket.
Option B: $181,350
$181,350 is above the supported result for retainage cash forecast; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $186,000
$186,000 is above the supported result for retainage cash forecast; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Withheld and earned live in different drawers; Forecasts Receipts tells which opens.
Reference Hint
Open-book path: tab Principles and Practices of Commercial Construction, 11th Edition, 2024 to Construction payment estimating; retainage cash-flow forecast; match the role, timing, and required approval before choosing.
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