L and M are the only partners in LM Partnership. They decided to liquidate the partnership at a time when the balances in the two partners’ capital accounts were ($10,000) and $50,000, respectively. The partnership sold its assets for their aggregate book value of $40,000. The partnership agreement satisfies the requirements of Section 704(b). How much will partner M be entitled to receive in liquidation of his interest?
a. $20,000.
b. $40,000.
c. $50,000.
d. $0.