Johns Lawn Equipment sells high-quality lawn mowers and offers a 3-year warranty on all new lawn mowers sold. In 2020, John sold $289,800 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 2020. John wishes to measure the fair value of the agreement to determine the warranty liability for sales made in 2020. The controller for Johns Lawn Equipment estimates the following expected warranty cash outflows associated with the mowers sold in 2020.

Year 2021 2022 2023 Cash Flow Estimate $2,570 3,960 5,000 $2,700 4,990 6,340 $3,900 5,480 7,310 Probability Assessment 20% 60% 20% 30% 50% 20% 30% 40% 30% Using expected cash flow and present value techniques, determine the value of the warranty liability for the 2020 sales. Use an annual discount rate of 6%. Assume all cash flows occur at the end of the year. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) The value of the warranty liability for the 2020 sales $ Year 2021 2022 2023 Cash Flow Estimate $2,570 3,960 5,000 $2,700 4,990 6,340 $3,900 5,480 7,310 Probability Assessment 20% 60% 20% 30% 50% 20% 30% 40% 30% Using expected cash flow and present value techniques, determine the value of the warranty liability for the 2020 sales. Use an annual discount rate of 6%. Assume all cash flows occur at the end of the year. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) The value of the warranty liability for the 2020 sales $