Question #4 During 2014, Gum Co. introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to dollar sales are 2% within 12 months following the sale and 3% in the second 12 months following the sale. Sales and actual warranty claims for the years ended December 31, 2014, and 2015, are as follows: Sales $250,000 $250,000 Actual Warranty Claims $2,250 $7,500 2014 2015 What amount should Gum report as estimated warranty liability on its December 31, 2015, balance sheet? Show your work. a. b. Is warranty a contingent liability? Explain