Adams, Inc., has 10,000 shares of 5%, $100 par value preferred stock and 40,000 shares of $1 par value common stock outstanding at December 31, 2013. There were no dividends declared in 2014 and a $120,000 dividend was declared in 2015.

Assuming the preferred stock is cumulative, what is the amount of dividends received by the preferred stock in 2015?

$50,000 $70,000 $100,000 $20,000

Correct answer is $100,000