schaub skis inc is a manufacturer of ski equipment

Schaub Skis, Inc. is a manufacturer of ski equipment with paid in capital of $4,000,000. It reports on the accrual basis and uses a fiscal year ending April 30. On May 1, 200A Schaub's records showed an accumulated earnings and profits of $250,000. By September 1, 200A, in anticipation of an above average season, Schaub's management had forecasted a $1,000,000 profit for the fiscal year ending April 30, 2008. Based on this projection, the Board of Directors voted to pay a $200,000 cash dividend to its 100. shareholders of record on October 15, 2004. The dividend was thereafter paid on October 31, 200A. The rosy predictions turned into gloom, however, when the ski resorts were hit by their worst snow season on record Most ski resorts did not open until after Christmas and then only to mediocre snow depths. Much of the ski equipment sold on consignment was returned to the factory. As a result Schaub's operations for the 200A-200B year produced a net operating loss of $500,000. The controller's office is beginning work on the program required to run Form 1099 for stockholders of record on October 15, 200A. They have sought your aid to help them make the appropriate determination as to how to characterize the October 31, 200A distribution. What is your advice