Beckham Company has 1,000 shares of 5%, $100 par cumulative preference shares outstanding at December 31, 2014. No dividends have been paid on these shares for 2013 or 2014. Dividends in arrears at December 31, 2014 total

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Dividends are cumulative, which means that any unpaid dividends accrue and must be paid before any dividends can be paid to common shareholders. Since no dividends have been paid for 2013 or 2014 on the 1,000 outstanding preference shares, the total dividends in arrears at December 31, 2014 would be $10,000 (1,000 shares x $100 par value x 5% dividend rate x 2 years). Therefore, the best choice is D.

Beckham Company Has 1,000 Shares of 5%, $100 Par Cumulative