Year: 2016 Sales: 500,000 Warrenty payments: 4,500

Year 2017 Sales: 800,000 Warenty payments: 40,000

Myron. Inc., manufactures and sells computer monitors with a three-year warranty. Warranty costs are expected to average 7% of sales during the warranty period. The following table shows the sales and actual warranty payments during the first two years of operations: Based on these facts, what amount of warranty liability should Myron. Inc. report on its balance sheet at December 31. 2017? A. exist46, 500 B. exist91,000 C. exist40,000 D. exist44, 500