During 2019, Waterway Industries 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, 3% in the year after sale, and 4% in the second year after sale. Sales and actual warranty expenditures for the first three-year period were as follows: (assume the accrual method)

Sales Actual WarrantyExpenditures

2019 $1591000 $41000

2020 2505000 66000

2021 2101000 133000

$6197000 $240000

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

$84040

$317730

$69360

$0