Delta Diamonds Uses a Periodic Inventory System

question 25

Multiple Choice

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 $500,two were purchased on July 9 for $550 each,and two were purchased on September 23 for $600 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)$2,250.
• B)$1,650.
• C)$2,200.
• D)$550.

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Definitions:

Lost Profits

Represent potential earnings that were not realized due to a breach of contract or other wrongful act.

Out-of-Pocket Rule

A legal principle used to calculate damages based on the actual direct losses and costs incurred by a plaintiff.

Misrepresents

To provide false or misleading representations about something, often with the intention to deceive.

Damage Award

A damage award is the amount of money granted to a party in a lawsuit for compensation for loss, injury, or harm suffered as a result of another party's actions.