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When Crossett Corporation was organized in January Year 1 , it immedjately issued 4,000 shares of $50 par, 6 percent, cumulative preferred stock and 50,000 shares of $20 par common stock. 4,000 $0 6% 50,000 $20 Its earnings history is as follows: Year 1 , net loss of $35,000, Year 2 , net income of $125,000, Year 3, net income of $215,000. The corporation did not pay a dividend in Year 1. $35,000$125,000$215,000 Required (Use the celis from the given information above to complete this question.) a. How much is the dividend arrearage as of lanuary 1, Year 2 ? b. Assume that the board of directors declares a $25,000 cash dividend at the end of Year 2 (remember that the Year 1 and Year 2 prelerred dividends are due). How will the dividend be divided between the preferred and common stockholders? $25,000 b. Assume that the board of directors declares a $25,000 cash dividend at 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? (Use the cells from the given information and from Required A to complete this question.) (Amounts to be deducted should be indicated with a minus sign.)

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