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When Crossett Corporation was organized in January, Year 1, it immediately issued 5,200 shares of...

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Accounting

When Crossett Corporation was organized in January, Year 1, it immediately issued 5,200 shares of $46 par, 7 percent, cumulative
preferred stock and 12,000 shares of $6 par common stock. Its earnings history is as follows: Year 1, net loss of $17,600; Year 2, net
income of $119,000; Year 3, net income of $83,500. The corporation did not pay a dividend in Year 1.
Required
a. How much is the dividend arrearage as of January 1, Year 2?
Dividend arrearage
b. Assume that the board of directors declares a $48,988 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?
Total amount distributed to preferred shares
Total amount distributed to common shares
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