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Question
Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends:
Year 1 $10,000
Year 2 45,000
Year 3 90,000
Determine the dividends in arrears for preferred stock for the second year.
a. $25,000
b. $10,000
c. $0
d. $30,000
Answer
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