Reference no: EM131770681
Question: Which is the correct answer? Please show the work to get to the answer.
The Amy Corporation was incorporated on January 1, 2006. The company issued 5,000 shares of 5% $100 par value cumulative preferred stock and 200,000 shares of $10 par value common stock. On December 31, 2006, Amy declared $20,000 of cash dividends. On December 31, 2007, Amy declared $52,000 of cash dividends. Compute the allocation of the cash dividends to common and preferred shareholders on December 31, 2007.
A. preferred $26,000, common $26,000.
B. preferred $40,000, common $12,000.
C. preferred $30,000, common $22,000.
D. preferred $5,000, common $47,000.
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