Citation Builders, Inc., builds office buildings and single-family homes. The office buildings s and single-family homes. The office buildings are constructed under contract with reputable buyers. The or soon after. To secure the home upon completion, buye balance due upon completion of the house and transfer of title. Failure Occasionally, homes remain unsold for as long to promote the sale. homes are constructed in developments ranging from 10-20 homes and are typically sold during construction rs must pay a deposit of 10% of the price of the home with the remaining to pay the full amount results in forfeiture of the down payment. as three months after construction. In these situations, sales price reductions are used During 2018, Citation began construction of an office building for incurred, estimated costs to complete at year-end, billings, and cash collections for the life of the contract are as follows: Altamont Corporation. The total contract price is $21 million. Costs 2018 2019 2020 Costs incurred during the year Estimated costs to complete as of year-end Billings during the year Cash eollections during the year s 4,200,0009,975,0004,725,000 8,400,000 9,110,000 10,000,000 12,600,000 2, 100,000 1,890,000 4,725,000 10,500,000 Also during 2018, Citation began a development consisting of $820,000, but individual sales prices are negotiated with buyers. Deposits were received for eight of completed during 2018 and paid for in full for $820,000 each by the buyers. The completed homes cost The construction costs incurred during 2018 for the nine uncompleted homes totaled $3,690,000 12 identical homes. Citation estimated that each home will sell for $615,000 each to construct Required 1. Which method is most equivalent to recognizing revenue at the point of delivery? 2. Answer the following questions assuming that Citation uses the completed contract method for its office building contracts: 2-a. How much revenue related to this contract will Citation report in its 2018 and 2019 income statements? 2-b. What is the amount of gross profit or loss to be recognized for the Altamont contract during 2018 and 2019? 2-c. What will Citation report in its December 31, 2018, balance sheet related to this contract? (Ignore cash.) assuming that Citation uses the percentage-of-completion method for its office building contracts 3-a. How much revenue related to this contract will Citation report in its 2018 and 2019 income statements