Panther Co. had a quality-assurance warranty liability of $359,000 at the beginning of 2016 and $310,000 at the end of 2016. Warranty expense is based on 3% of sales, which were $45 million for the year. What were the warranty expenditures for 2016?

$1,301,000.

$1,350,000.

$1,399,000.

$0.