EZMow sold 4,000 lawn tractors in 2020 for $1,750 each. Each lawn tractor comes with a one-year warranty. EZMow estimates total warranty costs at $125 per lawn tractor sold. EZMow spent $142,000 during 2020 for warranty costs on these lawn tractors (the 4,000 lawn tractors sold in 2020). As a result of these sales and warranties EZMow's financial statements will include

		$7,000,000 of revenue and a $642,000 current warranty liability.
		$7,500,000 of revenue and $142,000 of warranty expense.
		$7,000,000 of sales revenue, $500,000 of warranty expense, and a $358,000 current warranty liability.
		$7,000,000 of sales revenue and a $500,000 current warranty liability.