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What amount of loss on purchase commitment should included

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Problem - During 2020, Mighty Company signed a non-cancelable contract to 1 p purchase 5,000 sacks of rice at P1,200 per sack with delivery to be made in 2021. On December 31, 2020, the price of rice had fallen to P1,000 per sack. On April 1, 2021, the Company accepts delivery of rice when the price is P1,120 per sack. In the December 31, 2020 Income Statement, what amount of loss on purchase commitment should be included?

Reference no: EM132848853

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