During 2020, Harrington Co. introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to dollar sales are 2% within 12 months following sale and 4% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2020 and 2021 are as follows: At December 31,2021 , (assuming the accrual method) Harrington should report an estimated warranty liability of $19,000 $0 $35,000