Radio Hut Inc. offers a two-year assurance warranty against failure of its products. The estimated liability is 1.5% in the year of sale and 3% in the second year. Sales and actual warranty expense for 2020 and 2021 were:

	Sales	Actual Warranty Costs Incurred During Year
2020	$3,500,000	$110,000
2021	$3,900,000	$195,000

The warranty provision on the December 31, 2020 statement of financial position sheet was

$47,500.

$105,000.

$110,000.

$157,500