9) During 2015, Blevert Co. introduced a new line of machines that carry a three-year warranty against manufacturer's defects. Based on industry experience, warranty costs are estimated at 1% of sales in the year of sale, 3% in the year after sale, and 5% in the second year after sale. Sales and actual warranty expenditures for the first three-year period were as follows:

Sales Actual Warranty Expenditures

2015 $500,000 $6,000

2016 1,500,000 25,000

2017 2,000,000 105,000

$4,000,000 $136,000

What amount should Blevert report as a liability at December 31, 2017?