Ace Industries has the following shareholders' equity accounts at December 31, 2018: Preferred stock, $100 par value, 10% dividend, 50,000 shares issued and outstanding$5,000,000 Common stock, $6 par value, 1 million shares issued and outstanding 6,000,000 Paid-in capital in excess of par 119,000,000 Unrestricted retained earnings 7,500,000 Retained earnings restricted for plant expansion 2,500,000 Assuming that the preferred stock is cumulative, and that there are no dividends in arrears, what is the maximum dividend that may be distributed to common shareholders at December 31, 2018?
A. $9,500,000
B. $7,000,000
C. $2,000,000
D. $7,500,000
Answer: B
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