Hailey, a salesperson, is presenting a sales dialogue to the buyers from Harter Tech, who want to buy a new range of copiers from Hailey’s company. Hailey has found that some of the added features of the product are valued by the buyers. In this scenario, Hailey has identified the of the copier.

Right medical introduced a new implant that carries a five-year warranty against manufacturer’s defects. based on industry experience with similar product introductions, warranty costs are expected to approximate 2% of sales. sales were $8 million and actual warranty expenditures were $42,750 for the first year of selling the product. what amount (if any) should right report as a liability at the end of the year?