Rapid, Inc., a cash basis corporation, distributes $30,000 of accounts receivable to Sylvester, an individual shareholder, in cancellation of his stock, pursuant to a plan of complete liquidation. If Sylvester's basis in his stock is $10,000, the tax results are:

a. Rapid has no gain, but Sylvester has ordinary income of $20,000. 
b. Rapid recognizes $30,000 of ordinary income and Sylvester has no gain or loss. 
c. Rapid recognizes $30,000 of ordinary income and Sylvester has a capital gain of $20,000. 
d. Rapid recognizes no gain and Sylvester recognizes a capital gain of $20,000 under Code Section 331.