Hector is in the 28% tax bracket. he acquired 10,000 shares of stock in eclipse corporation three years ago at a cost of $100 per share. in the current year, hector received a payment of $225,000 from eclipse corporation in exchange for 2,000 of his shares in eclipse. eclipse

Right medical introduced a new implant that carries a five-year warranty against manufacturer’s defects. based on industry experience with similar product introductions, warranty costs are expected to approximate 2% of sales. sales were $8 million and actual warranty expenditures were $42,750 for the first year of selling the product. what amount (if any) should right report as a liability at the end of the year?