Question 20

Adler Construction Co. uses the percentage-of-completion method. In 2014, Adler began work on a contract for $6,600,000 and it was completed in 2015. Data on the costs are:

		Year Ended December 31
		2014	2015
Costs incurred		$2,340,000	$1,680,000
Estimated costs to complete		1,560,000

For the years 2014 and 2015, Adler should recognize gross profit in 2014 and 2015 of

2014

2015

Question 21

Emporia Corporation is a lessee with a capital lease. The asset is recorded at $810,000 and has an economic life of 8 years. The lease term is 5 years. The asset is expected to have a fair value of $270,000 at the end of 5 years, and a fair value of $90,000 at the end of 8 years. The lease agreement provides for the transfer of title of the asset to the lessee at the end of the lease term. What amount of depreciation expense would the lessee record for the first year of the lease?