Fargo Company's outstanding stock consists of 750 shares of noncumulative 5% preferred stock with a $10 par value and 4,400 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.

Dividend Declared

year 1 $31,000

year 2 $9,000

year 3 $40,000

The amount of dividends paid to preferred and common shareholders in year 1 is:

• $375 preferred; $30,625 common.
• $7,500 preferred; $23,500 common.
• $25,7500 preferred; $5,250 common.
• $15,500 preferred; $15,500 common.
• $31,000 preferred; $0 common.