Problems eBook Calculator Algo Algo Algo Instructions General Journal Instructio

Question

Problems eBook Calculator Algo Algo Algo Instructions General Journal Instructions 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 Deciared a semiannual dividend of $0.3 per share on common stock to shareholders of record on May 10, payable May 20 Currently, 86,800 shares of $i 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 Oct. 25 Declared semiannual dividend of so.3 per share on common stock to shareholders of record on November 10, payable on November 20 Nov. 20 Paid the cash dividends

Explanation / Answer

Date

Accounts Titles & Explanation

Debit

Credit

April 15

Income tax expense

$7580

     Cash

$7580

(For recording of payment of tax)

April 25

Cash dividends (86800 * $0.3)

$26040

     Common dividends payable

$26040

(For recording declartion of dividend)

May 20

Common dividends payable

$26040

     Cash

$26040

(For recording payament of cash dividends)

June 15

Income tax expense

$7580

     Cash

$7580

(For recording of payment of tax)

Sep. 15

Income tax expense

$7580

     Cash

$7580

(For recording of payment of tax)

Oct. 25

Cash dividends (86800 * $0.3)

$26040

     Common dividends payable

$26040

(For recording declartion of dividend)

Nov. 20

Common dividends payable

$26040

     Cash

$26040

(For recording payament of cash dividends)

Dec. 15

Income tax expense

$7580

     Cash

$7580

(For recording of payment of tax)

Dec. 31

Income tax expense ($36180 – $30320)

$5860

     Income tax payable

$5860

(Adjusting entry for additional income tax liability)

Dec. 31

Income summary

$115400

     Reatined earnings

$115400

(For closing income summery)

Dec. 31

Retained earnings ($26040 + $26040)

$52080

     Cash dividends

$52080

(For closing cash dividends account)

Date

Accounts Titles & Explanation

Debit

Credit

April 15

Income tax expense

$7580

     Cash

$7580

(For recording of payment of tax)

April 25

Cash dividends (86800 * $0.3)

$26040

     Common dividends payable

$26040

(For recording declartion of dividend)

May 20

Common dividends payable

$26040

     Cash

$26040

(For recording payament of cash dividends)

June 15

Income tax expense

$7580

     Cash

$7580

(For recording of payment of tax)

Sep. 15

Income tax expense

$7580

     Cash

$7580

(For recording of payment of tax)

Oct. 25

Cash dividends (86800 * $0.3)

$26040

     Common dividends payable

$26040

(For recording declartion of dividend)

Nov. 20

Common dividends payable

$26040

     Cash

$26040

(For recording payament of cash dividends)

Dec. 15

Income tax expense

$7580

     Cash

$7580

(For recording of payment of tax)

Dec. 31

Income tax expense ($36180 – $30320)

$5860

     Income tax payable

$5860

(Adjusting entry for additional income tax liability)

Dec. 31

Income summary

$115400

     Reatined earnings

$115400

(For closing income summery)

Dec. 31

Retained earnings ($26040 + $26040)

$52080

     Cash dividends

$52080

(For closing cash dividends account)

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