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 the first three-year period were:

	Cash Sales	Actual Warranty Expenditures
2020	$80,000	$1,000
2021	110,000	4,100
2022	120,000	9,800

a. Provide entries for the three years for (1) credit sales, (2) estimated warranty expense, and (3) actual expenditures.

b. What amount should be reported as a liability on the balance sheet at the end of each year?

c. Assume instead that at the end of 2022, the company changed its estimate of the second year after sale to 2% of sales rather than 3%. Provide the entry to record the adjustment to the warranty liability (assuming all entries described above were recorded as planned).

Note: Round your answers to the nearest whole dollar.