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BRAD BRIDGEWATER, INC.
          Computation of Gross Profit to Be
Recognized on Uncompleted Contract
Year Ended December 31, 2004
_____________________________________________________________

Total contract price
        Estimated contract cost at completion                                     $2,000,000
             ($700,000 + $1,300,000)
        Fixed fee                                                                                               450,000
                Total                                                                                            2,450,000

        Total estimated cost                                                                        2,000,000
        Gross profit                                                                                          450,000
        Percentage of completion ($700,000 ÷ $2,000,000)                            35%
        Gross profit to be recognized ($450,000 X 35%)                     $   157,500


:.0001pt;tab-stops:30.0pt right 492.0pt 497.0pt'>(The initial estimated total gross profit before tax on the contract.)

le='tab-stops:30.0pt 60.0pt right dotted 318.0pt blank 405.0pt 504.0pt'>        Sales Revenue—Texts*.................................            80,000

        Allowance for Returns...................................       1,920,000
        Accounts Receivable.....................................                               16,000,000

        *A debit to either Sales Revenue—Texts or Sales Returns could be made here.



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