The 2014 annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $119.9 million in 2014. It also declared and paid dividends on common shares in the amount of $2 per share. During 2014, Sneer had 1,000,000,000 common shares authorized; 387,570,300 shares had been issued. The balance in Retained Earnings was $1,554 million on December 31, 2013, and 2014 Net Income was $858 million.
Required
1. Prepare journal entries to record the declaration, and payment, of dividends on (a) preferred and (b) common shares.
2. Using the information given above, prepare a statement of retained earnings for the year ended December 31, 2014.