Outstanding Shares of the Abel Corporation Included 20,000 Ordinary Shares

Multiple Choice

Outstanding shares of the Abel Corporation included 20,000 ordinary shares with a $5 par and 10,000 shares of 5%, $10 par noncumulative preference shares.In 2010, Abel declared and paid dividends of $4,000.In 2011, Abel declared and paid dividends of $12,000.How much of the 2011 dividend was distributed to preference shareholders?

A) $7,000
B) $4,000
C) $5,000
D) None of the above