w When Crossett Corporation was organized in January, Year 1. it immediately issued 4 200 shares of $50 par, 4 percent, cumulative preferred stock and 10,000 shares of $7 par common stock. Its earnings history is as follows: Year 1, net loss of $12.900; Year 2, net income of $120,000; Year 3, net income of $118,100. The corporation did not pay a dividend in Year 1. Required a. How much is the dividend arrearage as of January 1, Year 2? Dividend arrourage b. Assume that the board of directors declares a $31,300 cash dividend at the end of Year 2 (remember that the Year 1 and Year 2 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders? Total amount distributed to preferred shares Total amount distributed to common shares