Frozen Co. introduced a new snow blower during 2020. The new product carries a two-year warranty against defects. The estimated warranty costs are 2% of sales within 12 months following the sale and 3% in the second 12 months following the sale. Sales and actual warranty claims for the years ended December 31, 2020, and 2021, are as follows: Sales Actual warrenty expenditures
2020 $200,000 $12,000
2021 $325,000 35,000
$2,000,000 $47,000
At December 31, 2021. (assuming the accrual method) Eaton should report an estimated warranty liability of:

a. $0.
b. $53,000.
c. $73,000.
d. $61,000.
e. None of the above.