Partner L Received a $55,000 Cash Distribution from the KLM

Partner L received a $55,000 cash distribution from the KLM Partnership in liquidation of his 25% interest.Immediately prior to distribution, L's outside basis was $48,000.KLM had the following balance sheet: $\begin{array}{ll}&\text { Inside Basis }&FMV\\\text { Cash }&\$ 57,000 & \$57,000 \\\text { Inventory }&45,000 & 53,000 \\\S 1231 \text { and capital assets }&90,000&122,000\\&\$192,000&\$232,000\\\text { Debt }&\$32,000&\$32,000\\\text { Capital: Partner L }&40,000&40,000\\\text { Others }&120,000&150,000\\&\$192,000&\$232,000\end{array}$ Because of the distribution, L should recognize:

A) $15,000 capital gain
B) $10,000 capital gain and $5,000 ordinary income
C) $8,000 capital gain and $7,000 ordinary income
D) $10,000 capital gain
E) $8,000 capital gain and $2,000 ordinary income