During 2006, Younger Co What Amount Should Younger Report as a Liability at December

Multiple Choice

During 2006, Younger Co.introduced a new line of machines that carry a three-year warranty against manufacturer's defects.Based on industry experience, warranty costs are estimated at 2% of sales in the year of sale, 4% in the year after sale, and 6% in the second year after sale.Sales and actual warranty expenditures for the first three-year period were as follows: $\begin{array}{rcc}&\text { Sales } &\text { Actual Warranty Expenditures }\\2006 & \$ 600,000 & \$ 8,000 \\2007 & 1,500,000 & 45,000 \\2008 & {2,100,000} & {135,000}\\&{\$ 4,200,000}&{\$ 189,000}\end{array}$ What amount should Younger report as a liability at December 31, 2008?

A) $0
B) $15,000
C) $204,000
D) $315,000