Answer:
The correct option is D
Explanation:
Year 2012
Balance = Preferred Stock Dividend - Total Dividend paid
= (500 × $10) - $3,000
= $5,000 - $3,000
= $2,000
Year 2013
Balance = Preferred Stock Dividend - Total Dividend paid + Balance of Year 2012
= (500 × $10) - $6,000 + $2,000
= $5,000 - $6,000 + $2,000
= $1,000
Year 2014
Common Stock Dividend = Preferred Stock Dividend - Total Dividend paid Balance of Year 2013
= (500 × $10) - $10,000 + $1,000
= $5,000 - $10,000 +$1,000
= $4,000
