Sony introduces a new compact music player to complete with Apple's iPod that carries a two-year warranty against manufacturer's defects. Based on industry experience with similar product introductions, warranty costs are expected to be approximately 1% of sales. By the end of the first year of selling the product, total sales are $29 million, and actual warranty expenditures are $ 100,000. What amount (if any) should Sony report as a liability at the end of the year