Jensen Corporation’s board of directors met on June 3 and declared a regular quarterly cash dividend of $.40 per share for a total value of $200,000. The dividend is payable on June 24 to all stockholders of record as of June 17. Excerpts from the statement of financial position for Jensen Corporation as of May 31 are presented as follows.
Cash 400,000
Accounts receivable (net) 800,000
Inventories $1,200,000
Total current assets 2,400,000
Total current liabilities $1,000,000
Assume that the only transactions to affect Jensen Corporation during June are the dividend transactions. If the dividend declared by Jensen Corporation had been a 10% stock dividend instead of a cash dividend, Jensen’s current liabilities would have been