Well dang, I have always used the A5 line.  I make a note and then when I get over to the IA I check to make sure that the amounts on line 2 and 3 are adjusted, and they always have been.  However looking at the schedule B, I see what you mean about it wanting a total and then non-taxable to IA amount.  I checked every year back through 2012 and the IA schedule B is the same set-up.  I've actually used the program since 1996 although I'm not willing to check all those years lol.  Even though IA is notoriously slow in notifying taxpayers when they don't like something they aren't that bad that I wouldn't have heard something on the 2012-2016 ones filed that way.  Bottom line is they are getting the correct amount reported on the return so I wouldn't worry about it.  

I am not able to answer your question about the K-1.  Does the adjusted amount show up in the first column.  If it does again I wouldn't worry about it.  Your only other option is a bunch of overrides to get it to fill out the schedule B correctly.