Arch Corp. sold machinery for $ 80,000 on december 31, 2015. This machinery was purchased on January 2, 2011 for 68,000 and had an adjusted basis of $40,000 at the date for sale. For 2015, Arch should report:

a) Ordinary income of $12,000 and Sec 1231 gain of $28,000

b) Ordinary income of $28,000 and Sec 1231 gain of $12,000

c) Ordinary income of $40,000

d) Se 1231 gain of 40,000

Please explain.