Blue Jay, Inc., manufactures and sells computer monitors with a three-year warranty. Warranty costs are expected to average 7% of sales during the warranty period. The following table shows the sales and actual warranty payments during the first two years of operations: Based on these facts, what amount of warranty liability should Blue Jay, Inc., report on its balance sheet at December 31, 2017? $96, 250 $43, 550 $52, 700 $38, 750