The Following Information and Transactions Took Place During 2020 Prepare Journal Entries for the Above Transactions

question 111

Essay

The following information and transactions took place during 2020:
$\begin{array}{|l|l|}\hline \text { May-18 } & \begin{array}{l}\text { Declared a } \$ 8 \text { per share cash dividend on } 20,000 \text { common shares issued and } \\\text { outstanding. }\end{array} \\\hline \text { Jul-2 } & \text { Paid the cash dividends declared on May } 18 \text {. } \\\hline \text { Aug-31 } & \begin{array}{l}\text { Preparing closing entries. The balance in the income summary is } \$ 45,000 \\\text { credit. }\end{array} \\\hline\end{array}$ Prepare journal entries for the above transactions.

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Definitions:

Group Accounts

Financial statements that combine the accounts of a parent company with those of its subsidiaries, presenting the financial position and results of operation of the group as a single economic entity.

Contingent Liability

A potential obligation that may arise depending on the outcome of a future event or set of circumstances.

Deferred Tax Liability

This is a tax obligation due in the future for income already recorded in the financial statements, resulting from temporary differences between accounting and tax treatments.

Goodwill

The excess amount paid over the fair value of net assets acquired in a business combination, representing intangible assets such as brand reputation or customer relationships.