Aurora Gold Company produced 650,000 ounces of gold in 2018.Average sales price was $870/oz.The price was $870/oz at the start of the year and $870/oz at the end of the year.Production cost averaged $588/oz,which has been stable for several years.The company had 50,000 ounces in inventory at the beginning of the year,and 20,000 ounces at the end of the year.
Required:
a)Calculate Aurora Gold's revenue,cost of goods sold,and gross profit,assuming the company recognizes revenue at the point of sale/delivery.

b)Determine the amount that should be shown as ending inventory on Aurora's 2018 balance sheet.

Question

Aurora Gold Company produced 650,000 ounces of gold in 2018.Average sales price was $870/oz.The price was $870/oz at the start of the year and $870/oz at the end of the year.Production cost averaged $588/oz,which has been stable for several years.The company had 50,000 ounces in inventory at the beginning of the year,and 20,000 ounces at the end of the year.
Required:
a)Calculate Aurora Gold's revenue,cost of goods sold,and gross profit,assuming the company recognizes revenue at the point of sale/delivery.
  
b)Determine the amount that should be shown as ending inventory on Aurora's 2018 balance sheet.

Quizplus · Accepted Answer

The Answer of Aurora Gold Company produced 650,000 ounces of gold in 2018.Average sales price was $870/oz.The price was $870/oz at the start of the year and $870/oz at the end of the year.Production cost averaged $588/oz,which has been stable for several years.The company had 50,000 ounces in inventory at the beginning of the year,and 20,000 ounces at the end of the year.
Required:
a)Calculate Aurora Gold's revenue,cost of goods sold,and gross profit,assuming the company recognizes revenue at the point of sale/delivery.
  
b)Determine the amount that should be shown as ending inventory on Aurora's 2018 balance sheet.

Aurora Gold Company Produced 650,000 Ounces of Gold in 2018