Beckham Corporation has 3,000 shares of $100 par value, 7 percent cumulative preferred stock, and 10,000 shares of $10 par value common stock outstanding during its first five years of operation. Beckham Corporation paid cash dividends as follows: 2006, $10,500; 2007, $0; 2008, $65,000; 2009, $30,000; 2010, $15,000. The amount of dividends in arrears at the end of 2007 was

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The annual dividend for preferred stock is 3,000 shares * $100 * 7% = $21,000. In 2006, $10,500 was paid, leaving $10,500 in arrears. In 2007, no dividends were paid, adding another $21,000 to arrears, totaling $31,500 by the end of 2007.

Beckham Corporation Has 3,000 Shares of $100 Par Value, 7