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a) only lithium spodumene produced and sold after 1 May 2017 totalling 13,539 dmt has been recognised as revenue in the Profit & Loss. |
The revenue and expense statement only looks at 2 months May and June.
Operating sales revenue
Sale of Spodumene concentrate (a) 14,974 1 ship therefore 1 month production split over 2 months. June production sold in next qtr.
Cost of Sales
Mining costs 1782 2 months costs - May and July
Processing costs 3092 2 months costs - May and July
Transport costs 815 2 months costs - May and July
Administration and other site costs 531 2 months costs - May and July
Royalties 925 2 months costs - May and July
Agent fees 745 2 months costs - May and July
Depreciation and amortisation 3482 2 months costs - May and July
Net inventory movement 1636 2 months costs - May and July
Total Cost of Sales 13008 2 months costs - May and July
Therefore divide cost by 2 to get cost of sales in may as it is incurred over may and june.
Cost of Sales in May (1 month) 6504
Revenue recognised for May shipment (1 month) 14974
Gross Profit for May 8470
Therefore for the month of May GXY made $8,470,000 gross profit based on the lower contract price of $830 AUD.Over twelve months at 1 ship a month they will make $100 million in gross profit.
Accrual accounting: Records revenue when it is earned and expenses when they are incurred.
As June expenses are incurred in this quarter but June spod is only sold in next quarter, in essence we are subtracting 2 months expenses from 1 months revenue. With the new 2017 pricing profit is even larger. Do i pass accounting 101. We can now bicker over the fine detail.
