Ultrasonic Sound Wave Ltd. manufactures a line of amplifiers that carry a three-year warranty against defects. Based on experience, the estimated warranty costs related to dollar sales are as follows: first year after sale1% of sales; second year after sale3% of sales; and third year after sale4% of sales. Sales and actual warranty expenditures for the first three years of business were:

Year	Sales	Warranty Expenditures
2015	$760000	$16000
2016	1030000	46200
2017	1047000	81000

Required:

1. Calculate the amount that Ultrasonic Sound Wave Ltd. should report as warranty expense on its 2017 income statement and as a warranty liability on its December 31, 2017 statement of financial position using the assurance-type warranty (expense-based approach). Assume that all sales are made evenly throughout each year and that warranty expenditures are also evenly spaced according to the rates above.