David Corp. sold machinery for $80,000 on December 31, 2018. This machinery was purchased on January 2, 2014, for $68,000 and had an adjusted basis of $40,000 at the date of sale. The machinery was used in David Corp. business. For 2018 David Corp. should report: a. Ordinary Income of $12,000 and capital gain of $28,000 b. Ordinary Income of $28,000 and capital gain of $12,000 c. Ordinary Income of $40,000 d. Capital gain of $40,000