*Exercise 13-20 Whispering Winds Corporation manufactures a line of amplifiers that carry a three-year warranty against defects. Based on experience, the estimated warranty costs related to dollar sales are as follows: first year after sale-1% of sales; second year after sale-2% of sales; and third year after sale-3% of sales. Sales and actual warranty expenditures for the first three years of business were: 2018 2019 2020 Sales $800,000 1,110,000 1,037,000 Warranty Expenditures $16,400 47,000 85,000 (a) Calculate the amount that Whispering Winds Ltd. should report as warranty expense on its 2020 income statement and as a warranty liability on its December 31, 2020 SFP using the assurance-type warranty (expense-based approach). Assume that all sales are made evenly throughout each year and that warranty expenditures are also evenly spaced according to the rates above. Warranty expense Warranty liability