Citation Builders, Incorporated, builds office buildings and single family homes The office buildings are constructed under contract with reputable buyers The homes are constructed in developments ranging from 1020 homes and are typically sold during construction or soon after To secure the home upon completion, buyers must pay a deposit of 10 of the price of the home with the remaining balance due upon completion of the house and transfer of title Failure to pay the full amount results in forfeiture of the down payment Occasionally, homes remain unsold for as long as three months after construction In these situations, sales price reductions are used to promote the sale During 2024, Citation began construction of an office building for Altamont Corporation The total contract price is $18 million Costs incurred, estimated costs to complete at year end, billings, and cash collections for the life of the contract are as follows 2024 2025 2026 Costs incurred during the year $ 3,600,000 $ 8,550,000 $ 4,050,000 Estimated costs to complete as of year end 10,800,000 4,050,000 Billings during the year 1,800,000 9,000,000 7,200,000 Cash collections during the year 1,620,000 7,580,000 8,800,000 Also during 2024, Citation began a development consisting of 12 identical homes Citation estimated that each home will sell for $780,000, but individual sales prices are negotiated with buyers Deposits were received for eight of the homes, three of which were completed during 2024 and paid for in full for $780,000 each by the buyers The completed homes cost $585,000 each to construct The construction costs incurred during 2024 for the nine uncompleted homes totaled $3,510,000 Assuming that Citation recognizes revenue over time according to percentage of completion for its office building contracts How much revenue related to this contract will Citation report in its 2024 and 2025 income statements What is the amount of gross profit or loss to be recognized for the Altamont contract during 2024 and 2025 What will Citation report in its December 31, 2024, balance sheet related to this contract (Ignore cash )

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Citation Builders, Incorporated, builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments

Citation Builders, Incorporated, builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments ranging from 1020 homes and are typically sold during construction or soon after. To secure the home upon completion, buyers must pay a deposit of 10% of the price of the home with the remaining balance due upon completion of the house and transfer of title. Failure to pay the full amount results in forfeiture of the down payment. Occasionally, homes remain unsold for as long as three months after construction. In these situations, sales price reductions are used to promote the sale.

During 2024, Citation began construction of an office building for Altamont Corporation. The total contract price is $18 million. Costs incurred, estimated costs to complete at year-end, billings, and cash collections for the life of the contract are as follows:

	2024	2025	2026
Costs incurred during the year	$ 3,600,000	$ 8,550,000	$ 4,050,000
Estimated costs to complete as of year-end	10,800,000	4,050,000
Billings during the year	1,800,000	9,000,000	7,200,000
Cash collections during the year	1,620,000	7,580,000	8,800,000

Also during 2024, Citation began a development consisting of 12 identical homes. Citation estimated that each home will sell for $780,000, but individual sales prices are negotiated with buyers. Deposits were received for eight of the homes, three of which were completed during 2024 and paid for in full for $780,000 each by the buyers. The completed homes cost $585,000 each to construct. The construction costs incurred during 2024 for the nine uncompleted homes totaled $3,510,000.

Assuming that Citation recognizes revenue over time according to percentage of completion for its office building contracts. How much revenue related to this contract will Citation report in its 2024 and 2025 income statements? What is the amount of gross profit or loss to be recognized for the Altamont contract during 2024 and 2025?

What will Citation report in its December 31, 2024, balance sheet related to this contract? (Ignore cash.)