For the last 10 years, Woody Co. has owned cumulative preferred stock issued by Hadley, Inc. During Year 2, Hadley declared and paid both the Year 2 dividend and the Year 1 dividend in arrears. How should Woody report the Year 1 dividend in arrears that was received in Year 2?
A.	Include in Year 2 income from continuing operations.
B.	As a retroactive change of the prior-period financial statements.
C.	Include, net of income taxes, after Year 2 income from continuing operations.
D.	As a reduction in cumulative preferred dividends receivable.