In its first year, a company made sales of $100,000 on account. All of the customers paid their accounts before year-end. The merchandise sold is subject to product warranties. The company assumes that warranty costs will be 4% of sales. During the same year, the company replaced $3,000 of defective warranted products. It expects to replace $1,000 of the merchandise sold in the first year during the second year. The company uses the accrual-method of accounting. Which of the following is true? None of these are true. The company's revenue in the first year is $97,000. The company's warranty expense in the first year is $3,000. The company's warrany payable at the end of the first year is $1,000. All of these are true