Halverstein Company's Outstanding Stock Consists of 7,000 Shares of Cumulative

Multiple Choice

Halverstein Company's outstanding stock consists of 7,000 shares of cumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value.During the first three years of operation,the corporation declared and paid the following total cash dividends. The amount of dividends paid to preferred and common shareholders in Year 2 is:

A) $3,500 preferred; $2,500 common.
B) $3,000 preferred; $3,000 common.
C) $0 preferred; $6,000 common.
D) $4,200 preferred; $1,800 common.
E) $6,000 preferred; $0 common.