Keith, Inc., becomes an S corporation on January 1, 20X1. Sally, the sole shareholder, has a stock basis of $20,000 at January 1, 20X1, an accumulated adjustments account (AAA) balance of $0, and an earning and profits account in the amount of $6,000. For the 20X1 taxable year, Keith, Inc., has the following:

Taxable income $30,000

Tax-exempt income $4,000

Capital gain $5,000

Expenses applicable to tax-exempt income $1,000

Charitable contributions $400

Disallowed 50% of meal and entertainment expenses $800

Cash distribution to Sally $18,000

What is the AAA of Keith, Inc., at December 31, 20X1?

A. $15,800

B. $22,300

C. $25,000

D. $34,000