A corporation was organized on January 1 At that time 10000

A corporation was organized on January 1 At that time 10000 shares of common were sold and issued at 1000 per share cash 20000 of the proceeds was used to purchase equipment The corporation had promised to pay 200 per share in dividends during the year if income exceeded 40000 As it turned out income was 60000 however due to a severe cash shortage the corporation declared a scrip dividend resulting in a current liability rather than an immediate cash dividend