At December 31, 2010 and 2011, Apex Co. had 3,000 shares of $100 par, 5% cumulative preferred stock outstanding.

No dividends were in arrears as of December 31, 2009. Apex did not declare a dividend during 2010. During 2011, Apex paid a cash dividend of $10,000 on its preferred stock. Apex should report dividends in arrears in its 2011 financial statements as a(n)

a. Accrued liability of $15,000.

b. Disclosure of $15,000.

c. Accrued liability of $20,000.

d. Disclosure of $20,000.