During 2016, The Molly Machine Company began selling a new type of machine that carries a two-year warranty against defects. Based on past industry and company experience, estimated warranty cost should total $2,000 per machine sold. Sales and actual warranty expenditures for 2016 were $2,000,000 (40 machines) and 22,000 respectively. What amount should Molly report at its esrtimated warranty liablility at December 31, 2016?

a. 58,000

b. 120,000

c. 22,000

d. 0