Sony introduces a new compact music player to compete with Apples iPod that carries a two-year warranty against manufacturers defects. Based on industry experience with similar product introductions, warranty costs are expected to be approximately 2% of sales. By the end of the first year of selling the product, total sales are $29.5 million, and actual warranty expenditures are $150,000. What amount (if any) should Sony report as a liability at the end of the year? (Enter your answer in dollars, not in millions (i.e. 5 should be entered as 5,000,000).)

Warranty liability