Excom manufactures high-end whole home electronic systems. The company provides a two-year warranty for all products sold. The company estimates that the warranty costs related to dollar sales are 2% for the first year of warranty and 5% for the second year of warranty. Sales and actual warranty expenditures for 2018 and 2019 are presented below:

2018 2019

Sales $600,000 $800,000

Actual Warranty Exp 30,000 40,000

What is the estimated warranty liability at the end of 2019?

		$16,000
		$28,000
		$38,000
		$58,000