cash dividends and income taxes during the year 245464

CASH DIVIDENDS AND INCOME TAXES 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 $30,000. Based on this estimate, it will make four quarterly payments of $7,500 each on April 15, June 15, September 15, and December 15. Made the first payment.

25 Declared a semiannual dividend of $0.45 per share on common stock to shareholders of record on May 10, payable May 20. Currently, 80,000 shares of $1 par common stock are outstanding.

May 20 Paid the cash dividends.

June 15 Made estimated tax payment of $7,500.

Sept. 15 Made estimated tax payment of $7,500.

Oct. 25 Declared semiannual dividend of $0.45 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 $7,500.

31 Bebeto’s actual 20-2 income tax is $35,000. This amount will be paid by March 15,

20-3. Made adjustment for the additional amount owed.

31 Net income for 20-2 was $100,000. Closed the income summary account.

31 Closed the cash dividends account.

REQUIRED

Prepare journal entries for the transactions.

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