Freidrichs Company has issued and outstanding 11,000 shares of cumulative, 6%, €50 par value preference shares which it sold for €54 per share at the beginning of 2012. The company has never paid preference dividends. As of December 31, 2014, dividends in arrears are

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The annual dividend for the preference shares is 6% of €50 par value, which is €3 per share. With 11,000 shares, the annual dividend is €33,000. Since the company has not paid dividends for three years (2012, 2013, and 2014), the dividends in arrears are 3 years x €33,000 = €99,000.

Freidrichs Company Has Issued and Outstanding 11,000 Shares of Cumulative