False Value Hardware began 2013 with a credit balance of $31,500 in the allowance for sales returns account. Sales and cash collections from customers during the year were $570,000 and $530,000, respectively. False Value estimates that 4% of all sales will be returned. During 2013, customers returned merchandise for credit of $20,000 to their accounts.

What is the balance in the allowance for sales returns account at the end of 2013?

$34,300.

$11,500.

$42,800.

$22,800.