The Annual Dividend on Nonconvertible Cumulative Preferred Shares Is $10,000

The annual dividend on nonconvertible cumulative preferred shares is $10,000.At the beginning of the current year, there were 3 years of dividends in arrears.During the current year, $38,000 of dividends on the preferred shares was declared, and $35,000 were paid.What amount of dividends on preferred shares will be subtracted from earnings when computing basic EPS for the current year?

A) $30,000
B) $38,000
C) $10,000
D) $35,000
E) $40,000

Correct Answer:

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