Johns Lawn Equipment sells high-quality lawn mowers and offers a 3-year warranty on all new lawn mowers sold. In 2017, John sold $272,000 of new specialty mowers for golf greens for which Johns service department does not have the equipment to do the service. John has entered into an agreement with Mower Mavens to provide all warranty service on the special mowers sold in 2017. John wishes to measure the fair value of the agreement to determine the warranty liability for sales made in 2017. The controller for Johns Lawn Equipment estimates the following expected warranty cash outflows associated with the mowers sold in 2017.

Year		Cash Flow Estimate			Probability Assessment
2018		$2,670			20%
		3,740			60%
		4,850			20%
2019		$2,910			30%
		4,620			50%
		5,660			20%
2020		$4,350			30%
		6,040			40%
		7,240			30%