During 2020, Rosas Co. introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to dollar sales are 1% within 12 months following sale and 2% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2020 and 2021 are as follows:

Actual Warranty

Sales Expenditures

2020 $500,000 $5,500

2021 $700,000 $12,000

$1,200,000 $17,500

At December 31, 2021, (assuming the accrual method) Rosas should report an estimated warranty liability of

Use commas but do not use dollar signs and round to the nearest dollar.