A Cash Basis Calendar Year C Corporation Holds $200,000 of Accounts

A cash basis calendar year C corporation holds $200,000 of accounts receivable on the date of its conversion to an S corporation on February 14.By the end of the year, $120,000 of these receivables are collected.Calculate any built-in gains tax, assuming that there is sufficient taxable income.

A) $0.
B) $35,000.
C) $42,000.
D) $70,000.
E) None of the above.