X Your answer is incorrect. Try again. Novak Corporation 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 sale-1% of sales; second year after sale-2% of sales; and third year after sale-3% of sales. Sales and actual warranty expenditures for the first three years of business were: 2018 Warranty Expenditures $17,100 48,400 80,000 Sales $870,000 1,010,000 1,065,000 2019 2020 (a) Calculate the amount that Novak Ltd. should report as warranty expense on its 2020 income statement and as a warranty liability on its December 31, 2020 SFP 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. Warranty expense 80000 X Warranty liability 96700