Extreme sports has $100,000 of 9% non cumulative, non participating preferred stock outstanding also has $500,000 of common stock outstanding.

Extreme sports has $100,000 of 9% non cumulative, non participating preferred stock outstanding also has $500,000 of common stock outstanding. In the company's first year of operation, no dividends were paid. During the second year they paid $50,000. How should dividends be distributed?