Assume the following year 2 income statement for Johnstone Corporation, which was a C corporation in year 1 and elected to be taxed as an S corporation beginning in year 2. Johnstone's earnings and profits at the end of year 1 were $10,910. Marcus is Johnstone's sole shareholder, and he has a stock basis of $43.500 at the end of year 1. Sales revenue Johnstone Corporation Income Statement December 31, Year 2 Cost of goods sold Salary to owners Employee wages Depreciation expense Miscellaneous expenses Interest income Overall net income Year 2 (S Corporation) $164,000 (38,500) (63,500) (54,000) (7,500) (4,350) 11,690 $ 7,840 What is Johnstone's accumulated adjustments account at the end of year 2, and what amount of dividend income does Marcus recognize on the year 2 distribution in each of the following alternative scenarios? a. Johnstone distributed $6,700 to Marcus in year 2. Accumulated adjustments account Dividend income b. Johnstone distributed $10,700 to Marcus in year 2. Accumulated adjustments account Dividend income c. Johnstone distributed $16,700 to Marcus in year 2. Accumulated adjustments account Dividend income