The balance sheet of Sonic Sales Limited reported the following at December 31, 2017: Shareholders' Equity

Preferred shares, redeemable, nonvoting, cumulative,

authorized 16,000 shares, liquidation value $350,000 ...........................$ 350,000

Common shares, authorized 200,000 shares, issued 90,000 shares ............. 340,000

Retained earnings ..................................................................... 120,000

Total shareholders' equity ............................................................ $810,000

Notes to the financial statements indicate that 16,000 of the cumulative preferred shares were issued and outstanding. The shares paid a dividend of $1.40. Preferred dividends have not been paid for three years, including the current year. On the balance sheet date, the market value of Sonic Sales Limited's common shares was $3.00 per share.

Required

1. Are the preferred shares cumulative or noncumulative? How can you tell?

2. Which class of shareholders controls the company? Give your reason.

3. What is the total contributed capital of the company?

4. What was the total market value of the common shares?

5. Compute the book value per share of the preferred shares and the common shares.