Franco is a shareholder in an S corporation. At the beginning of the year, he purchased 1,500 shares of the corporation for $30,000. He then received a Schedule K-1 (Form 1120-S) for the same year reporting his share of the ordinary business income, $10,000. The only other item reported on the Schedule K-1 was a $2,000 cash distribution. What is Franco's year-end adjusted basis in the corporation? $28,000 $32,000 $38,000 $40,000