At January 1, 20X4, Clare Corporation Had Outstanding Capital Shares

At January 1, 20X4, Clare Corporation had outstanding capital shares as shown below. During December, 20X4, it declared and paid cash dividends of $48,000 to the preferred shareholders. (1) Common shares--100,000 shares outstanding (2) Preferred shares--20,000 shares outstanding, $0 .80 cumulative. The shares were issued at a price of $15 per share. How many years were the preferred dividends in arrears?

A) One year.
B) Two years.
C) Three years.
D) Four years.