When Express Corporation was organized in January 2011, it immediately issued 2,000 shares of \(\$ 50\) par, 7 percent, cumulative preferred stock and 30,000 shares of \(\$ 20\) par common stock. Its earnings history is as follows: 2011 , net loss of \(\$ 25,000 ; 2012\), net income of \(\$ 120,000 ; 2013\), net income of \(\$ 250,000\). The corporation did not pay a dividend in 2011.
Required

a. How much is the dividend arrearage as of January 1, 2012?

b. Assume that the board of directors declares a \(\$ 30,000\) cash dividend at the end of 2012 (remember that the 2011 and 2012 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders?