Glenrose Co

Glenrose Co. introduced a high-quality leather briefcase in 2010. The company provides a three-year warranty on the products and estimates that 1% of the briefcases sold will need to be repaired in Year 1, 3% in Year 2, and 4% in Year 3. The average expected repair cost per briefcase is $60. During 2010, the company sold 50,000 briefcases and spent $17,500 for repairs. Related to these briefcases, Glenrose

A) does not need to recognize any warranty liability in 2010.
B) should recognize $17,500 of warranty expense in 2010.
C) should recognize $30,000 of warranty expense in 2010.
D) should recognize $120,000 of warranty expense in 2010.
E) should recognize $240,000 of warranty expense in 2010.