Fargo Company's outstanding stock consists of 450 shares of noncumulative 5% preferred stock with a $10 par value and 5500 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paidyear 1$35,000?year 2$7000?year 3$44,000?The amount of dividends paid to preferred and common shareholders in year 1 is:
A. $29,7500 preferred; $5250 common.
B. $4500 preferred; $30,500 common.
C. $225 preferred; $34,775 common.
D. $35,000 preferred; $0 common.
E. $17,500 preferred; $17,500 common.
Answer: C
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