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eBook Calculator Instructions General Journal Instructions Cash Dividends and In

ID: 2520911 • Letter: E

Question

eBook Calculator Instructions General Journal Instructions Cash Dividends and Income Taxes 1. Prepare journal entries for the transactions. f an amount box does not require an entry, leave it blank. During the year ended December 31, 20-2, Bebeto Company completed the following selected transactions: Apr. 15 Estimated that its 20-2 income tax will be $30,320. Based on this estimate, it will make four quarterly payments of $7,580 each on April 15, June 15, September 15, and December 15. Made the first payment. 25 Declared a semiannual dividend of so.3 per share on common stock to sharehoiders of record on May 10, payable May 20. Currently, 86,800 shares of $1 par common stock are outstanding. May 20 Paid the cash dividends June 15 Made estimated tax payment of $7,580 Sept. 15 Made estimated tax payment of $7,580. Declared semiannual dividend or $0.3 per share on common stock to shareholders of record on November 10, payable on November 20 Oct. 25 Nov. 20 Paid the cash dividends.

Explanation / Answer

Date: April 15

Entry:    Income Tax Expense A/C (Dr.)                   $7580

                                To Income Tax Payable A/C (Cr.)                               $7580

Date: April 25

Entry:    Dividend Expense A/C (Dr.)                         $260400 (86800*1*0.3)

                                To Dividend Payable A/C (Cr.)                    $26040 (86800*1*0.3)

Date: May 20

Entry:    Dividend Payable A/C (Dr.)                          $260400 (86800*1*0.3)

                                To Bank A/C (Cr.)                                             $26040 (86800*1*0.3)

Date: June 15

Entry:    Income Tax Expense A/C (Dr.)                   $7580

                                To Income Tax Payable A/C (Cr.)                               $7580

Date: Sep 15

Entry:    Income Tax Expense A/C (Dr.)                   $7580

                                To Income Tax Payable A/C (Cr.)                               $7580

Date: Oct 25

Entry:    Dividend Expense A/C (Dr.)                         $260400 (86800*1*0.3)

                                To Dividend Payable A/C (Cr.)                    $26040 (86800*1*0.3)

Date: Nov 20

Entry:    Dividend Payable A/C (Dr.)                          $260400 (86800*1*0.3)

                                To Bank A/C (Cr.)                                             $26040 (86800*1*0.3)

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