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During 2019, Waterway Industries introduced a new line of machines that carry a three-year warranty against manufacturer's defects

Accounting

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During 2019, Waterway Industries introduced a new line of machines that carry a three-year warranty against manufacturer's defects. Based on industry experience, warranty costs are estimated at 2% of sales in the year of sale, 3% in the year after sale, and 4% in the second year after sale. Sales and actual warranty expenditures for the first three-year period were as follows: (assume the accrual method)

Sales Actual Warranty Expenditures

2019 $1,607,000 $41,000

2020 $2,495,000 $67000

2021 $2,100,000 $133,000

Total $6,202,000 $241,000

What amount should Waterway report as a liability at December 31, 2021?

$68720

$317180

$84000

$0