Midwest Products is a wholesale distributor of leaf rakes. Thus, peak sales occur in August of each year as shown in the company's sales budget for the third quarter, given below:

July August September Total

Budgeted sales (all on account) $570,000 $855,000 $464,000 $1,889,000

From past experience, the company has learned that 15% of a month's sales are collect in the month of sale, another 75% are collected in the month following sale, and the remaining 10% are collected in the second month following sale.May sales totaled $427,000, and June sales totaled $520,000.

1. How much of May's sales are collected in July?

1. 15% of $427,000
2. 10% of $570,000
3. 10% of $427,000
4. None

2. How much of the June sales are collected in July?

1. 75% of $520,000
2. 75% of $570,000
3. 15% of $570,000
4. 15% of $520,000