Early in 2000, ABC Corp. was organized with authorization to issue 100,000 shares of €100 par value preferred stock and 500,000 shares of €1 par value common stock. Ten thousand shares of preferred stock were issued at par and 170,000 shares of common stock were sold for € 15 per share. The preferred stock pays an 8% cumulative dividend and is callable at €105.
During the first 4 years of operations, the corporation earned a total of € 1,025,000 and paid dividends of € 0.75 per share each year on its outstanding common stock
1. Prepare the stockholder's equity section of the Balance sheet at December 2003. Include a supporting schedule showing your computation of the amount of retained earnings reported
2. Are there any dividends in arrear on the company's preferred stock at the end of 2003? Explain your answer.