Fridge Tech manufactures refrigerators and provides a one-year warranty on all products. Estimated warranty costs are $225 per unit sold. At the beginning of 2017, Fridge Tech reported a liability for an estimated $7.8 million in warranty costs. Over the course of 2017, Fridge Tech sold 60,000 units for a total of $243 million. It also paid warranty claims of $9 million on current and previous year sales. Assuming the accrual method is used, how much liability should Fridge Tech report on its balance sheet at the end of 2017?

A :

$2,800,000.

B :

$12,300,000.

C :

$4,500,000.

D :

$13,500,000.