False Value Hardware began 2021 with a credit balance of $31,200 in the refund liability account. Sales and cash collections from customers during the year were $710,000 and $670,000, respectively. False Value estimates that 6% of all sales will be returned. During 2021, customers returned merchandise for credit of $28,000 to their accounts. What is the balance in the refund liability account at the end of 2021?

Multiple Choice:

A) $3,200.

B) $70,600.

C) $42,600.

D) $45,800.