Albert Corp If the Expense Warranty Accrual Method Is Used, What Amount

Multiple Choice

Albert Corp. introduced a new machine on January 1, 2014. The machine carried a two-year warranty against defects. The estimated warranty costs related to dollar sales were 3% in the year of sale and 5% in the year after sale. Additional information follows:

$\begin{array}{l}\begin{array}{rrr}\text { Actual Warranty }\\\underline{\text { Expenditures }}&\underline{\text { Sales}}&\underline{\text { Year}}\\\$ 600 & \$ 40,000 & 2014 \\2,200 & 60,000 &2015\end{array}\end{array}$

If the expense warranty accrual method is used, what amount relating to warranty expense should be reflected on the December 31, 2015 income statement?

A) $2,200
B) $4,800
C) $5,200
D) $7,400