Rusty Hardware makes only cash sales. It began 2021 with a credit balance of $32,300 in the refund liability account. Sales during 2021 were $630,000. Rusty estimates that 6% of all sales will be returned. During 2021, customers returned merchandise for credit of $28,600 to their accounts.

What is the balance in the refund liability account at the end of 2021?

Multiple Choice

• $32,300.
• $40,500.
• $44,200.
• $41,500.