When Crossett Corporation was organized in January, Year $1,$ it immediately issued $5,200$ shares of $$46$ par, $7$ percent, cumulative

preferred stock and $12,000$ shares of $$6$ par common stock. Its earnings history is as follows: Year $1,$ net loss of $$17,600$; Year $2,$ net

income of $$119,000$; Year $3,$ net income of $$83,500.$ 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 arrearage

b$.$ Assume that the board of directors declares a $$48,988$ 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