During 2019, Salton Co. introduced a new line of machines that carry a three-year

warranty against manufacturers defects. Based on industry experience, warranty

costs are estimated at 1% of sales in the year of sale, 2% in the year after sale,

and 3% in the second year after sale. Sales and actual warranty expenditures for

the first three-year period were as follows:

Sales

Actual Warranty Expenditures

2019

$ 1,400,000

$ 26,000

2020

1,000,000

40,000

2021

1,400,000

90,000

$3,800,000

$156,000

What amount should Salton report as a liability at December 31, 2021?