Hamilton Corp. sold a new model of laser printer in 2020 and 2021 to customers along with a two-year warranty guaranteeing the product against operational defects. Hamilton estimates warranty costs based on its experience and industry experience. For the laser printers sold in 2020 and 2021, Hamilton estimates warranty costs will total 1% of sales within the first 12 months following the sale and an additional 3% of sales in the second 12 months following the sale. Here are actual sales and warranty expenditures in the years ended December 31, 2020 and 2021:

	Sales	Actual Warranty Expenditures
2020	$500,000	$3,450
2021	2,250,000	31,400
Total for the two years	$2,750,000	$34,850

The customers do not pay extra for the warranties when they purchase the laser printers. What amount should Hamilton report as its total liability for warranties on its balance sheet at December 31, 2021?

		$90,000
		$67,500
		$47,650
		$75,150