When Crossett Corporation was organized in January. Year 1, it immediately issued 4,000 shares of $50 par, 6 percent, cumulative preferred stock and 50,000 shares of $20 par common stock. Its earnings history is as follows. Year 1, net loss of $35,000. Year 2, net income of $125,000, Year 3, net income of $215,000. The corporation did not pay a dividend in Year 1 Required a. How much is the dividend arrearage as of January 1, Year 2? b. Assume that the board of directors declares a $40,000 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?