Sheriville Hotel, Inc., included the following stockholders equity on its year-end balance sheet at December 31, 2012,

Question:

Sheriville Hotel, Inc., included the following stockholders’ equity on its year-end balance sheet at December 31, 2012, with all dollar amounts, except par value per share, adapted and in millions:

Stockholders’ Equity$ Millions

Paid-in Capital:

Preferred Stock, 6% cumulative, par value $50 per share;....... $ 65

1 0,000,000 shares authorized, 1 ,300,000 shares issued and outstanding

Common Stock, par value $1 per share; 800,000,000 shares

authorized, 240,000,000 shares issued and outstanding....... 240

Paid-in Capital in Excess of Par—Common............ 67

Total Paid-in Capital..................... $372

Retained Earnings....................... 21 0

Total Stockholders’ Equity................... $582

Requirements

1. Identify the different issues of stock Sheriville Hotel, Inc., has outstanding.

2. Give the two entries to record issuance of the Sheriville Hotel, Inc., stock. Assume all the stock was issued for cash. Explanations are not required.

3. Assume that preferred dividends are in arrears for 2011 and 2012. Record the declaration of a $65 million cash dividend on December 30, 2013. Assume no change in the preferred stock account in 2013. Use separate Dividends Payable accounts for preferred and common stock. Round to the nearest $1 million. An explanation is not required.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...