Delta Diamonds uses a periodic inventory system. The company had five one-carat

Question

Delta Diamonds uses a periodic inventory system. The company had five one-carat diamonds available for sale this year: one was purchased on June 1 for $900, two were purchased on July 9 for $1,000 each, and two were purchased on September 23 for $1,050 each. On December 24, it sold one of the diamonds that was purchased on July 9. Using the specific identification method, its ending inventory (after the December 24 sale) equals:

A. $4,000.

B. $1,000.

C. $2,900.

D. $4,100.

Delta Diamonds uses a periodic inventory system. The company had five one-carat diamonds available for sale this year: one was purchased on June 1 for $900, two were purchased on July 9 for $1,000 each, and two were purchased on September 23 for $1,050 each. On December 24, it sold one of the diamonds that was purchased on July 9. Using the specific identification method, its ending inventory (after the December 24 sale) equals:

Explanation / Answer

Calculate ending inventory using specific identification method :

So answer is a) $4000

one purchase 900 Two purchase 1000 Three purchase 1000 Fourth purchase 1050 Fifth purchase 1050 Total cost of goods available for sale 5000 Less: Cost of goods sold -1000 Ending inventory 4000

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