Question: Jay received Schedule K-1 (Form 1120-S) from S corporation FRD Inc. for the current tax year. It shows the following: $5,000 ordinary business income, $2,000 ordinary dividends, $500 charitable contributions, and a $1,000 distribution affecting his basis. Jay'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 Jay's adjusted basis in FRD Inc. at the end of the tax year?
a) $18,500 b) $17,500 c) $16,500 d) $15,500