Grades M Question 2 - Chapter 11 Homework. Con Homework 5aved Help When Crossett Corporation was organized in January, Year 1, it immediately issued 5,100 shares of $45 par, 5 percent, cumulative preferred stock and 12,000 shares of $8 par common stock. Its earnings history is as follows: Year 1, net loss of $16,900; Year 2. net income of $123,000; Year 3, net Income of $111.400. The corporation did not pay a dividend in Year 1. Required a. How much is the dividend arrearage as of January 1, Year 2? Dividend arrearago a b. Assume that the board of directors declares a $36,450 cash dividend at the end of Year 2 (remember that the Year 1 and Year 2 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders? Total amount distributed to preferred shares Total amount distributed to common shares