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
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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