Fargo Company's Outstanding Stock Consists of 400 Shares of Noncumulative

Fargo Company's outstanding stock consists of 400 shares of noncumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. $$\begin{array}{l}\begin{array} { l r r } &\text { Dividend Declared }\\\text { year 1 } & \$ 20,000 \\\text { year 2 } & \$ 6,000 \\\text { year 3 } & \$ 32,000 \\\end{array}\end{array}$$ The amount of dividends paid to preferred and common shareholders in year 1 is:

A) $4,000 preferred; $16,000 common.
B) $10,000 preferred; $10,000 common.
C) $20,000 preferred; $0 common.
D) $200 preferred; $19,800 common.
E) $17,000 preferred; $3,000 common.