Sweet Company's Outstanding Stock Consists of 1,000 Shares of Cumulative

Sweet Company's outstanding stock consists of 1,000 shares of cumulative 5% preferred stock with a $100 par value and 10,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. $\begin{array}{ll}&\text { Dividend Declared }\\\ \text { year 1 } & \$ 2,000 \\\text { year 2 } & \$ 6,000 \\\text { year 3 } & \$ 32,000\end{array}$

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The amount of dividends paid to preferred and common shareholders in year 3 is:

A) $32,000 preferred; $0 common.
B) $15,000 preferred; $17,000 common.
C) $5,000 preferred; $27,000 common.
D) $7,000 preferred; $25,000 common.
E) $0 preferred; $32,000 common.