Nowell Inc. had the following stock issued and outstanding at January 1, Year 2:

1. 150,000 shares of no-par common stock.

2. 30,000 shares of $50 par, 4 percent, cumulative preferred stock. (Dividends are in arrears for one year, Year 1.)

On March 8, Year 2, Nowell declared a $175,000 cash dividend to be paid March 31 to shareholders of record on March 20.

Required

What amount of dividends will be paid to the preferred shareholders versus the common shareholders?

Distributed to Shareholders Preferred Common Total dividend declared Preferred arrearage Current preferred dividend Available for common Distributed to common Total