Cash Dividends and Income Taxes

1. Prepare journal entries for the transactions.

If 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 $27,680. Based on this estimate, it will make four quarterly payments of $6,920 each on April 15, June 15, September 15, and December 15. Made the first payment.

25

Declared a semiannual dividend of $0.3 per share on common stock to shareholders of record on May 10, payable May 20. Currently, 81,500 shares of $1 par common stock are outstanding.

May 20

Paid the cash dividends.

June 15

Made estimated tax payment of $6,920.

Sept. 15

Made estimated tax payment of $6,920.

Oct. 25

Declared semiannual dividend of $0.3 per share on common stock to shareholders of record on November 10, payable on November 20.

Nov. 20

Paid the cash dividends.

Dec. 15

Made estimated tax payment of $6,920

1. Prepare journal entries for the transactions.

If an amount box does not require an entry, leave it blank.

Page: 1

	DATE	ACCOUNT TITLE	DOC. NO.	POST. REF.	DEBIT	CREDIT
1	Apr. 15	Income Tax Expense					1
2		Cash					2
3							3
4	Apr. 25	Cash Dividends					4
5		Common Dividends Payable					5
6							6
7	May 20	Common Dividends Payable					7
8		Cash					8
9							9
10	Jun. 15	Income Tax Expense					10
11		Cash					11
12							12
13	Sep. 15	Income Tax Expense					13
14		Cash					14
15							15
16	Oct. 25	Cash Dividends					16
17		Common Dividends Payable					17
18							18
19	Nov. 20	Common Dividends Payable					19
20		Cash					20
21							21
22	Dec. 15	Income Tax Expense					22
23		Cash					23
24							24
25	Dec. 31	Income Tax Expense					25
26		Income Tax Payable					26
27							27
28	Dec. 31	Income Summary					28
29		Retained Earnings					29
30							30
31	Dec. 31	Retained Earnings					31
32		Cash Dividends					32
33							33

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