Problem: Jack received Schedule K-1 (Form 1120-S) from S corporation FRY Inc. for the current tax year. It shows the following: $5,000 in ordinary business loss, $2,000 in ordinary dividends, $500 in charitable contributions, and a $1,000 distribution affecting his basis. Jack's adjusted basis at the beginning of the tax year was $10,000, and he did nothing else during the year to affect his basis. What is Jack's adjusted basis at the end of the tax year?
a) $10,500 b) $ 5,500 c) $ 6,500 d) $ 7,500