Ladrian Enterprises enters into a non-cancellable purchase commitment contract on August 19, 2020 to purchase 10,000 units of inventory on February 19, 2021 for $5 per unit. At September 30, 2020, the fair market value of the units under contract has declined to $4.20 per unit. However by the end of the year, the fair market value has recovered to $4.50 per unit. By February 19, 2021 when the contract is fulfilled, the fair market value of the units under contract has increased to $5.25 per unit.

What is the balance in the estimated liability on purchase commitments on Ladrian's December 31, 2020 balance sheet?

		$0.80
		$8,000
		$0.50
		$(2,500)
		None of the other answer choices is correct.
		$0.00
		($0.25)
		$5,000