Determining Transaction Price and Refund Liability A distributor sells jewelry to a retail chain with the stipulation that 30% of the jewelry can be returned within six months. Actual returns have averaged 20% in each of the last 10 years. The distributor sells 14,000 items to retailers on account in January of 2020. Jewelry was sold to the distributor for $8 per item.

b. Determine the balance in Refund Liability on January 31, 2020, if the company had actual returns of $6,300 in January 2020.