Innovative Semiconductors sells perishable electronic components. Some must be shipped and stored in reusable protective containers. Customers pay a deposit for each container received. The deposit is equal to twice of the containers cost. They receive a refund when the container is returned. During 2016, deposits collected on containers shipped were $900,000. Deposits are forfeited if containers are not returned within 18 months. Containers held by customers at January 1, 2016, represented deposits of $400,000. In 2016, $825,000 was refunded and deposits forfeited were $55,000. The amount of liability for refundable deposits to be reported on the December 31, 2016 balance sheet should be:

a. $420,000 b. $400,000 c. $475,000 d. $900,000