On January 2, 1997, the King Company received its charter. It issued all of its authorized 3,000 shares of no-par preferred stock at \(\$ 104\) and all of its 12,000 authorized shares of nopar common stock at \(\$ 40\) per share. The preferred stock has a stated value of \(\$ 50\) per share, is entitled to a basic cumulative dividend of \(\$ 6\) per share, is callable at \(\$ 106\) beginning in 1999 , and is entitled to \(\$ 100\) per share plus cumulative dividends in the event of liquidation. The common stock has a stated value of \(\$ 10\) per share.

On December 31, 1998, the end of the second year of operations, retained earnings were \(\$ 90,000\). No dividends have been declared or paid on either class of stock

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

b. Compute the book value of each class of stock.

c. If \(\$ 42,000\) of dividends were declared as of December 31,1998 , compute the amount paid to each class of stock.