When Crossett Corporation was organized in January Year 1, it immediately issued 4,700 shares of $46 par, 5 percent, cumulative preferred stock and 11,000 shares of $13 par common stock. Its earnings history is as follows: Year 1, net loss of $17,800; Year 2, net income of $59,700; Year 3, net income of $91,400. 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 $37,620 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? Distributed to Shareholders Dividends paid: Preferred Common Arrearage from Year 1 Dividends related to Year 2 Total distribution