Martin Company has 15,000 shares of 10%, $50 par value, non-cumulative preferred stock and 50,000 shares of $5 par value common stock outstanding at December 31, 2007. There were no dividends declared in 2006. The board of directors declares and pays a $200,000 dividend in 2007.
A. What is the amount of dividends received by the common stockholders in 2007?
B. Assume that the preferred stock is cumulative and that there were no dividends in arrears as of January 1, 2006. What is the amount of dividends received by the common stockholders in 2007?