Question

Atreides International has operations in Arrakis. The balance sheet for this division in Arrakeen solaris shows assets of 36,000 solaris, debt in the amount of 15,000 solaris, and equity of 21,000 solaris.

  

a.	If the current exchange ratio is 1.25 solaris per dollar, what does the balance sheet look like in dollars? (Round your answers to 2 decimal places, e.g., 32.16.)

  

Balance sheet
Assets	$	Debt	$
		Equity	$
Total assets	$	Total liabilities and equity	$

  

b.	Assume that one year from now the balance sheet in solaris is exactly the same as at the beginning of the year. If the exchange rate is 1.50 solaris per dollar, what does the balance sheet look like in dollars now?

  

Balance sheet
Assets	$	Debt	$
		Equity	$
Total assets	$	Total liabilities and equity	$

  

c.	Assume that one year from now the balance sheet in solaris is exactly the same as at the beginning of the year. If the exchange rate is 1.17 solaris per dollar, what does the balance sheet look like in dollars now? (Round your answers to 2 decimal places, e.g., 32.16.)

  

Balance sheet
Assets	$	Debt	$
		Equity	$
Total assets	$	Total liabilities and equity	$

Answer 1

Balance sheet in term of Solans is mention below:

Assets	Amount	Liability & equity	Amount
Assets	36,000	Equity	21,000
		Debt	15,000
Total Assets	36,000	Total Liability & equity	36,000

Now Exchange rate = 1.25 Solans per dollar

Value of assets in term of dollar = 36,000 / 1.25

                                                    = $28,800

Value of Equity in term of dollar = 21,000 / 1.25

                                                      = $16,800

Value of debt in term of dollar = 15,000 / 1.25

                                                  = $12,000

Balance sheet in term of dollar is mention below:

Assets	Amount	Liability & equity	Amount
Assets	$28,800	Equity	$16,800
		Debt	$12,000
Total Assets	$28,800	Total Liability & equity	$28,800

b.

Now Exchange rate = 1.50 Solans per dollar

Value of assets in term of dollar = 36,000 / 1.50

                                                    = $24,000

Value of Equity in term of dollar = 21,000 / 1.50

                                                      = $14,000

Value of debt in term of dollar = 15,000 / 1.50

                                                  = $10,000

Balance sheet in term of dollar is mention below:

Assets	Amount	Liability & equity	Amount
Assets	$24,000	Equity	$14,000
		Debt	$10,000
Total Assets	$24,000	Total Liability & equity	$24,000

c.

Now Exchange rate = 1.17 Solans per dollar

Value of assets in term of dollar = 36,000 / 1.17

                                                    = $30,769.23

Value of Equity in term of dollar = 21,000 / 1.17

                                                      = $17,948.72

Value of debt in term of dollar = 15,000 / 1.17

                                                  = $12,820.51

Balance sheet in term of dollar is mention below:

Assets	Amount	Liability & equity	Amount
Assets	$30,769.23	Equity	$17,948.72
		Debt	$12,820.51
Total Assets	$30,769.23	Total Liability & equity	$30,769.23