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
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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
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