Aurora Gold Company produced 650,000 ounces of gold in 2021. 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.
$$\begin{array} { | l | c | c | }
\hline & 2020 & 2021 \
\hline \text { Revenue } & \$ 546,000,000 & \
\hline \text { Cost of goods sold } & 382,200,000 & \
\hline \text { Gross profit } & 163,800,000 & \
\hline
\end{array}$$ b)Determine the amount that should be shown as ending inventory on Aurora's 2021 balance sheet.

Question

Aurora Gold Company produced 650,000 ounces of gold in 2021. 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.
 $$\begin{array} { | l | c | c | } 
\hline & 2020 & 2021 \
\hline \text { Revenue } & \$ 546,000,000 & \
\hline \text { Cost of goods sold } & 382,200,000 & \
\hline \text { Gross profit } & 163,800,000 & \
\hline
\end{array}$$ b)Determine the amount that should be shown as ending inventory on Aurora's 2021 balance sheet.

Quizplus · Accepted Answer

The Answer of Aurora Gold Company produced 650,000 ounces of gold in 2021. 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.
 $$\begin{array} { | l | c | c | } 
\hline & 2020 & 2021 \
\hline \text { Revenue } & \$ 546,000,000 & \
\hline \text { Cost of goods sold } & 382,200,000 & \
\hline \text { Gross profit } & 163,800,000 & \
\hline
\end{array}$$ b)Determine the amount that should be shown as ending inventory on Aurora's 2021 balance sheet.

Aurora Gold Company Produced 650,000 Ounces of Gold in 2021