Carpenter Inc. had a balance of $80,000 in its warranty liability account as of December 2006, Carpenter's warranty expenditures to service actual warranty claims totaled expense is estimated at 1% of sales. Sales in 2006 were $40 million, what was the warranty liability account as of December 31, 2006? 14. 31, 2005. In $445,000. Its warranty balance in the

A. $ 35,000.
B. $135,000.
C. $125,000.
D. $480,000.
E. None of the above