Question

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 .

Answer 1

Journal entries :

Date	account and explanation	debit	credit
Apr 15	Income tax expense	6920
	Cash		6920
	(To record tax paid)
Apr 25	Cash dividend (81500*.3)	24450
	Common Dividends Payable		24450
	(To recod diviend payable)
May 20	Common Dividends Payable	24450
	Cash		24450
	To record dividend paid)
June 15	Income tax expense	6920
	Cash		6920
	(To record income tax paid)
Sep 15	Income tax expense	6920
	Cash		6920
	(To record income tax paid)
Oct 25	Cash dividend	24450
	Common Dividends Payable		24450
	(To record dividend payable)
Nov 30	Common Dividends Payable	24450
	Cash		24450
	(To record dividend paid)
Dec 15	Income tax expense	6920
	Cash		6920
	(To record tax paid)
Dec 31	Income tax expense
	Income tax payable
Dec 31	Income summary
	Retained earning
Dec 31	Retained earnings	48900
	Cash		48900
	(To record dividend paid)

Note ; Net income is not give n in question