On January 1 of This Year, Conrad Nelson Contributed $15,000

question 5

Multiple Choice

On January 1 of this year, Conrad Nelson contributed $15,000 cash in exchange for 50 shares of stock in Sterling Inc., an S corporation. Sterling employs Conrad as its director of marketing. Conrad's current year salary was $70,000 and his pro rata share of Sterling's ordinary business income was $16,800. During the year, Conrad received a $9,000 cash distribution with respect to his Sterling stock. Compute Conrad's basis in his Sterling stock at year end.

• A) $15,000
• B) $22,800
• C) $31,800
• D) $92,800

---

Definitions:

Citric Acid Cycle

A key metabolic pathway that integrates the energy metabolism of carbohydrates, fats, and proteins through the oxidation of acetyl-CoA, producing ATP.

ATP Synthesis

The biochemical process of creating ATP (adenosine triphosphate), the primary energy carrier in cells, through cellular respiration or photosynthesis.

Glycolysis

A metabolic pathway that breaks down glucose into pyruvate, generating ATP and NADH in the process.

ATPs

Short for adenosine triphosphate, a molecule that carries energy within cells, supporting various functions including muscle contraction and chemical synthesis.