During 2014, Eaton Co

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During 2014, Eaton Co. introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to dollar sales are 2% within 12 months following sale and 4% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2014 and 2015 are as follows:

                                                                        Actual Warranty

                                                             Sales                                                      Expenditures

2014                                             P 800,000                                                         P12,000

2015                                                1 000 000                                                         30,000

                                                    P1 800 000                                                          P42,000

At December 31, 2015, Eaton should report an estimated warranty liability of

a. P0.

b. P10,000

c. P30,000.

d. P66,000.