Answer
D - $135,000
Work Step by Step
Before common stockholders can receive a dividend, all dividends must be paid to preferred stockholders for both the current year and any prior years (known as dividends in arrears). The $375,000 of dividends must be distributed to preferred stockholders for the two years in which dividends were omitted (2012 and 2013), as well as for the current year (2014), with the residual amount of 135,000 going to common stockholders:
375,000 – ((10,000*100*.08)*3) = 135,000
