Madison Hotel, Inc. included the following shareholders equity on its year-end balance sheet at December 31, 2014,

Question:

Madison Hotel, Inc. included the following shareholders’ equity on its year-end balance sheet at December 31, 2014, with all dollar amounts in millions:

Shareholders’ Equity $ Millions

Share Capital:

Preferred Shares, 6.5% cumulative......... $ 45

Common Shares; 500,000,000 shares authorized,

176,000,000 shares issued and outstanding...... 228

Total Share Capital............... 273

Retained Earnings............... 142

Total Shareholders’ Equity............$415

Requirements

1. Identify the different issues of shares Madison Hotel, Inc. has outstanding.

2. Give the two entries to record issuance of the Madison Hotel Inc. shares. Assume all the shares were issued for cash. Explanations are not required.

3. Assume that preferred dividends are in arrears for 2013 and 2014. Record the declaration of a $37 million cash dividend on December 30, 2015. Use separate Dividends Payable accounts for preferred and common shares. 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...