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problem 1: On January 1, 2020, Dell, Inc. contracted with the city of Little to provide custom built desks for the city schools. The contract made Dell the city's sole supplier and required Dell to supply no less than 4,000 desks and no more than 5,500 desks per year for two years. In turn, Little agreed to pay a fixed price of P110 per desk. During 2020, Dell produced 5,000 desks for Little. At December 31, 2020, 500 of these desks were segregated from the regular inventory and were accepted and awaiting pickup by Little. Little paid Dell P450,000 during 2020. What amount should Dell recognize as contract revenue in 2020?
Option 1: 450,000Option 2: 495,000Option 3: 550,000Option 4: 605,000
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