Aurora Gold Company produced 650,000 ounces of gold in 2012. 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 2012 balance sheet.

Question

Aurora Gold Company produced 650,000 ounces of gold in 2012. 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 2012 balance sheet.

Quizplus · Accepted Answer

The Answer of Aurora Gold Company produced 650,000 ounces of gold in 2012. 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 2012 balance sheet.

Aurora Gold Company Produced 650,000 Ounces of Gold in 2012