Sabas Company Has 20,000 Shares of $100 Par, 2% Cumulative

Multiple Choice

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