N January 1, 2020, Banana Company signed a three-year, noncancelable purchase contract to purchase up to 5,000 units of computer


My question:

n January 1, 2020, Banana Company signed a three-year, noncancelable purchase contract to purchase up to 5,000 units of computer part annually at P100 per unit and guaranteed a minimum annual purchase of 1,000 units. During 2020, the part unexpectedly became obsolete. The entity had 2,500 units of this inventory on December 31, 2020, and believed these parts can be sold as scrap for P20 per unit. What amount of loss from the purchase commitment should be reported in 2020


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