During 2010, the Alexandra Company began selling a new type of machine that carries a two-year warranty against all defects. Based on past industry and company experience, estimated warranty costs should total $2,000 per machine sold.
During 2010, sales and actual warranty expenditures were $2,000,000 (40 machines) and $22,000, respectively. What amount should Alexandra report as its estimated warranty liability at December 31, 2010?