Flanders Company Has Outstanding 18 Million Shares of $2 Par

Multiple Choice

Flanders Company has outstanding 18 million shares of $2 par value common stock and 2 million shares of $4 par value preferred stock.The preferred stock has an 8% dividend rate.The company declares $1,200,000 in total dividends for the year.Which of the following is correct if dividends in arrears are $60,000?

A) Preferred stockholders will receive $700,000;common stockholders will receive $500,000.
B) Preferred stockholders will receive $120,000;common stockholders will receive $1,080,000.
C) Preferred stockholders will receive $640,000;common stockholders will receive $560,000.
D) Preferred stockholders will receive $180,000;common stockholders will receive $1,020,000.