This is also accepted. It uses the formal Sie ("you"), which Duolingo introduces in a later lesson. When using the formal Sie, the verb conjugates in the same way as for the plural sie ("they"). Hence, when it's capitalised at the start of a sentence you can't tell which one it is without further context.
Perhaps you made an unwitting spelling error, causing Duo to suggest something that was in the database. Your answer, as you wrote it here, is correct and accepted already. If you happened to take a screenshot of buggy behaviour, please report it here: https://support.duolingo.com/hc/en-us/articles/204728264-How-do-I-report-a-bug-