Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following accounts were distributed as dividends:

Year 1 $10,000 Year 2 45,000 Year 3 90,000

Determine the dividends in arrears for preferred stock at the end of second year.

a. $30,000 b. $10,000 c. $25,000 d. $0

please give the steps too.