Fridges Inc. provides a two-year warranty on all refrigerators that it manufactures. Based on expected values, Fridges has estimated that amounts related to the warranty claims for sales made in 20X4 will be $650,000 in the first year following the sale and $400,000 in the second year. During 20X4, Fridge incurred costs for parts and labour of $520,000 for actual warranty claims. Fridge follows IFRS and has a December 31 year end. What amount of warranty expense will Fridge report for the year ended December 31, 20X4?

a.$520,000

b.$1,050,000

c.$530,000

d.$650,000