On April 1, 2008, Brad Bridgewater Inc. entered into a cost-plus-fixed-fee contract to construct an electric generator for Tom Dolan Corporation. At the contract date, Bridgewater estimated that it would take 2 years to complete the project at a cost of $2,000,000. The fixed fee stipulated in the contract is $450,000. Bridgewater appropriately accounts for this contract under the percentage-of-completion method. During 2008 Bridgewater incurred costs of $700,000 related to the project. The estimated cost at December 31, 2008, to complete the contract is $1,300,000. Dolan was billed $600,000 under the contract.

Instructions
Prepare a schedule to compute the amount of gross profit to be recognized by Bridgewater under the contract for the year ended December 31, 2008. Show supporting computations in good form.
(AICPA adapted)