Exercise 11.6A (Algo) Accounting for cumulative preferred dividends LO 11-3 When Crossett Corporation was organized in January. Year 1, it immediately issued 4,400 shares of $52 par, 7 percent, cumulative preferred stock and 11,000 shares of $6 par common stock. Its earnings history is as follows: Year 1 , net loss of $15,700. Year 2 , net income of $112,000, Year 3, net income of $93,000. 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 deciares a $44,032 cash dividend at the end of Year 2 (cemember that the Year 1 and Year 2 preferred dividenas are due). How will the dividend be divided between the preferred and common stockholders