18.Simpson buys large screen televisions for $800 each and then sells them for $1,500 each.During Year One, 5,000 sets were sold. Each sale includes a one-year warranty. Simpsonestimates that 5 percent of the sets will break and have to be fixed under the terms of thewarranty at a cost of $300 each. In Year Two, no more televisions are sold. Of the first batch,290 sets actually break and cost $310 each to fix. What is net income reported for Year Oneand what expense is reported for Year Two?A.Year One net income of $3,410,100 and Year Two expense of zeroB.Year One net income of $3,425,000 and Year Two expense of $14,900C.Year One net income of $3,500,000 and Year Two expense of $89,900D.Year One net income of $3,410,100 and Year Two expense of $14,900