During 2017, 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 2% of sales in the year of sale, 4% in the year after sale, and 6% in the second year after sale. Sales and actual warranty expenditures for the first three-year period were as follows:

Sales. Actual Warranty Expenditures

2017 $700,000. $5,000

2018 $1,300,000. $23,000

2019 $2,100,000. $100,000

______________________________________________

$4,100,000. $128,000

What amount should Blevert report as a liability at Dec 31, 2018?

a. $133,000

b. $235,000

c. $212,000

d. $156,000