Analyzing stockholders’ equity (Learning Objectives 2, 3, & 4) 20–25 min.

Malton Hotel, Inc., included the following stockholders’ equity on its year-end balance sheet at December 31, 2014, with all dollar amounts, except par value per share, adapted and in millions:

Paid-in Capital:

Preferred Stock, 8% cumulative, par value $10 per share;

50,000,000 shares authorized, 6,200,000 shares issued and outstanding Common Stock, par value $3 per share; 750,000,000 shares authorized, 239,000,000 shares issued and outstanding Paid-in Capital in Excess of Par—Common Total Paid-in Capital Retained Earnings Total Stockholders’ Equity

$ 62 717 68

$ 847 302

$1,149 Stockholders’ Equity $ Millions Requirements 1. Identify the different issues of stock that Malton Hotel, Inc., has outstanding.

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

3. Assume that preferred dividends are in arrears for 2013 and 2014. Record the declaration of a $40 million cash dividend on December 30, 2015. Assume no change in the preferred stock account in 2015. Use separate Dividends Payable accounts for preferred and common stock. Round to the nearest $1 million. An explanation is not required.

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