In its first year operation in 2020, Macy Furniture sells a line of products that carry a three-year warranty against defects at no extra charge. Based on industry experience, the estimated warranty costs are as follows: first year following the year of sale, 1% of sales: second year following the year of sale, 3% of sales; and third year following the year of sale, 5% of sales. Sales and actual warranty expenditures for 2020 were $200,000 and $1,500, respectively. The amount of warranty liability that Macy Furniture should report on the balance sheet at the end of 2020 is O $1,500 O $18.000 $16,500. $19.500