KAB Inc., a small retail store, had the following results for May. The budgets for June and July are also given.

May (actual) June (budget) July (budget)

Sales $42,000 40,000 $45,000

Cost of Sales 21,000 20,000 22,500

Gross Margin 21,000 20,000 22,500

Operating expenses 20,000 20,000 20,000

Operating Income $1,000 $0 $2,500

Sales are collected 80% in the month of the sale and the balance in the month following the sale. (There are no bad debts.) The goods that are sold are purchased in the month prior to sale. Suppliers of the goods are paid in the month following the purchase. The operating expenses are paid in the month of the sale.

What should be the amount of cash collected during the month of June?

A. $32,000. B. $40,000. C. $40,400. D. $41,000.