Kane Company issued all of its 5,000 shares of authorized preferred stock on January 1, 1997, at \(\$ 100\) per share. The preferred stock is no-par stock, has a stated value of \(\$ 5\) per share, is entitled to a cumulative basic preference dividend of \(\$ 6\) per share, is callable at \(\$ 110\) beginning in 2002 , and is entitled to \(\$ 100\) per share in liquidation plus cumulative dividends. On this same date, Kane also issued 10,000 authorized shares of no-par common stock with a \(\$ 10\) stated value at \(\$ 50\) per share.

On December 31, 1998, the end of its second year of operations, the company's retained earnings amounted to \(\$ 160,000\). No dividends have been declared or paid on either class of stock since the date of issue.

a. Prepare the stockholders' equity section of Kane Company's December 31, 1998, balance sheet.

b. Compute the book value in total and per share of each class of stock as of December 31, 1998.

c. If \(\$ 110,000\) of dividends are to be declared as of December 31,1998 , compute the amount payable to each class of stock.