Acme sells products with a 1-year warranty. Experience indicates that Acme incurs warranty costs equal to 0.75% of sales. On December 31, 2019, Acme reported a balance of $22,875 in its warranty liability account. During 2020, Acme reported sales of $2,683,500 of products covered by the warranty. Also, during 2020, Acme spent $22,500 on warranty claims. a. What will Acme report as warranty expense for 2020? b. What will Acme report as warranty liability as of December 31, 2020? Acme Warranty liability as of 12/31/2019 2020 sales Warranty claims paid in 2020 Estimated warranty cost 22,875 2,683,500 22,500 0.75%