During 2020, Coronado Industries introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to dollar sales are 5% within 12 months following sale and 3% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2020 and 2021 are as follows: Sales Actual Warranty Expenditures 2020 $ 900,000 $28,000 2021 1,300,000 55,600 $2,200,000 $83,600 At December 31, 2021, (assuming the accrual method) Coronado should report an estimated warranty liability of