Infinity Corporation Acquired 80 Percent of the Common Stock of an Egyptian

question 46

Multiple Choice

Infinity Corporation acquired 80 percent of the common stock of an Egyptian company on January 1, 20X8. The goodwill associated with this acquisition was $18,350. Exchange rates at various dates during 20X8 follow: Goodwill suffered an impairment of 20 percent during the year. If the functional currency is the U.S. dollar, how much goodwill impairment loss should be reported on Infinity's consolidated statement of income for 20X8?

• A) $3,680
• B) $3,670
• C) $3,690
• D) $3,700

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Definitions:

Initial Margin

The upfront payment required to enter into a trading position as a guarantee against potential losses.

Maintenance Margin

The minimum account balance that an investor must maintain in a margin account after buying securities on credit, to protect brokers against deficits.

Private Placements

The sale of stocks, bonds, or securities directly to private investors rather than through a public offering in the capital markets.

Primary Security Offerings

The process by which new securities are issued and sold to investors, allowing companies or governments to raise capital.