In 2016, Scranton, Inc sold 2,000 carpets for $50 each. The carpets carry a 2-year warranty for repairs. Scranton estimates that repair costs will average 3% of the total selling price. What is the amount that would be recorded in the warranty liability account as a result of selling the carpets during 2016?

a. $1,500
b. $3,000
c. $50
d. No liability should be recorded until the carpets are returned for repairs.

b