3. Specialty Appliances and More, Inc. [SAM] has a threeyear warranty on their solar refrigerators for defects. Warranty costs are estimated at 2% of sales in year one [the year ofthe sale}I and 5% of sales in each of the following two years. The warranty expires at the end of the third year. Annual sales and actual warranty repair costs were as follows: Solos Actual Warranty Coot Year1 $ 2?5.000 5 2?.500 Year 2 $ 350.000 $ 1?.500 Year 3 $ 425.000 $ 30.000 $ 1.050.000 $ ?5.000 What total amount should SAM record as warranty expense in the rst three years