3. Spencer Reid Company introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to sales are 2% within 12 months and 4% in the second 12 months following the sale. Sales and actual warranty costs for the years ended December 31, 2015 and 2016 are: Sales Actual Warranty Costs 2015 2016 $150,000 250,000 $2,250 7,500 What is the amount that Spencer should report as Estimated Warranty Liability on its December 31, 2016 balance sheet