When Crossett Corporation was organized in January Year 1, it immediately issued 4,900 shares of $55 par, 8 percent, cumulative preferred stock and 12,000 shares of $11 par common stock. Its earnings history is as follows: Year 1, net loss of $16,600; Year 2, net income of $63,700; Year 3, net income of $117,600. The corporation did not pay a dividend in Year 1.

1. How much is the dividend arrearage as of January 1, Year 2?
2. Assume that the board of directors declares a $53,620 cash dividend at the end of Year 2 How will the dividend be divided between the preferred and common stockholders?