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Exercise 11-6A (Algo) Accounting for cumulative preferred dividends LO 11-3 When Crossett Corporation was organized...

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Exercise 11-6A (Algo) Accounting for cumulative preferred dividends LO 11-3 When Crossett Corporation was organized in January, Year 1, it immediately issued 5,800 shares of $47 par, 4 percent, cumulative preferred stock and 11,000 shares of $13 par common stock: its earnings history is as follows: Year 1, net loss of $12,600; Year 2, net income of $124,000; Year 3, net income of $113,700. The corporation did not pay a dividend in Year 1 . Required a. How much is the dividend arrearage as of January 1, Year 2 ? b. Assume that the board of directors declares a $32,808 cash dividend ot the end of Year 2 (remember that the Year 1 and Year 2 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders

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