During 2014, PVP Co. introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to dollar sales are 3% within 12 months following sale and 4% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2014 and 2015 are as follows:

Show computation for an estimated warranty liability on (a) 12/31/2014 and (b) 12/31/2015.

2014 2015 Sales $ 900,000 1,000,000 $1.900.000 Actual Warranty Expenditures $10,000 30,000 $40.000