A Company Has 200,000 Shares of $1 Par Value Common

Multiple Choice

A company has 200,000 shares of $1 par value common stock and 20,000 shares of 7%,$100 par,cumulative preferred stock outstanding.The balance in Retained Earnings account at the beginning of the year was $1,500,000 and one year's dividends were in arrears.Net income for the current year was $2,000,000.If the company paid a dividend of $3 per share on its common stock,what is the balance in Retained Earnings account at the end of the year?

A) $3,500,000
B) $2,900,000
C) $2,760,000
D) $2,620,000
E) $620,000