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problem 1: On January 1, 2020, Card Corp. signed a three-year noncancelable purchase contract, which allows Card to purchase up to 500,000 units of a computer part annually from Hart Supply Co. at .10 per unit and guarantees a minimum annual purchase of 100,000 units. During 2020, the part unexpectedly became obsolete. Card had 250,000 units of this inventory at December 31, 2020, and believes these parts can be sold as scrap for .02 per unit. What amount of probable loss from the purchase commitment should Card report in its 2020 income statement?
Option 1: 24,000Option 2: 20,000Option 3: 16,000Option 4: 8,000
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