Anthony Company declared and paid $20,000 of dividends during 2014.The schedule of dividends follows: $$\begin{array} { l c }
\text { Date Dividend Declared \& Paid } & \text { Amount Paid } \
\text { March 31, 2014 } & \$ 5,000 \
\text { June 30, 2014 } & \$ 5,000 \
\text { September 30, 2014 } & \$ 5,000 \
\text { December 31, 2014 } & \$ 5,000
\end{array}$$ Anthony Company was acquired on June 1,2014 by Google Company.Google acquired 100 percent of Anthony Company.Both companies have a December 31 fiscal year end.What is the amount of preacquisition dividends in 2014?

Question

Anthony Company declared and paid $20,000 of dividends during 2014.The schedule of dividends follows: $$\begin{array} { l c } 
\text { Date Dividend Declared \& Paid } & \text { Amount Paid } \
\text { March 31, 2014 } & \$ 5,000 \
\text { June 30, 2014 } & \$ 5,000 \
\text { September 30, 2014 } & \$ 5,000 \
\text { December 31, 2014 } & \$ 5,000
\end{array}$$ Anthony Company was acquired on June 1,2014 by Google Company.Google acquired 100 percent of Anthony Company.Both companies have a December 31 fiscal year end.What is the amount of preacquisition dividends in 2014?

Quizplus · Accepted Answer

Preacquisition dividends are those declared and paid before the acquisition date. Since Google acquired Anthony Company on June 1, 2014, only the dividend declared and paid on March 31, 2014, counts as preacquisition, which is $5,000.

Anthony Company Declared and Paid $20,000 of Dividends During 2014