1. (5 points) Wadsworth Inc. started in business in 2021. It sold $10 million of merchandise in 2021 subject to a warranty that is good for 3 years after the year in which the merchandise was sold. As of 12/31/21, it estimates that it will have to pay $30,000 to repair defective merchandise that it sold in 2021. Required: a. What is the amount of warranty expense for 2021? b. What is the total amount of liabilities as of 12/31/21 as a result of the warranty? c. How much of the liability is a current liability as of 12/31/21? (continued on the reverse side) 1