Question

Atreldes International has operations in Arrakis. The balance sheet for this division in Arrakeen solaris shows assets of 52.000 solaris, debt in the amount of 26.000 solaris and equity of 26.000 solaris. a. If the current exchange ratio is 125 solaris per dollar, what does the balance sheet look like in dollars? (Round your answers to 2 decimal places, e.g. 3216.) Assets Balance sheet Debt Equity Total liabilities and equity Total assets 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 1.30 solaris per dollar, what does the balance sheet look like in dollars now? (Round your answers to the nearest whole dollar, e.g., 32) Assets Balance sheet Debt Equity Total liabilities and equity Total assets c. Assume that one year from now the balance sheet in solarts is exactly the same as at the beginning of the year. If the exchange rate is 112 solaris per dollar, what does the balance sheet look like in dollars now? (Round your answers to 2 decimal places, e.g. 32.16.) Assets Balance sheet Debt Equity Total abilities and equity Total assets

Answer 1

Assets = Solaris 52,000

Debt = Solaris 26,000

Equity = Solaris 26,000

Sub-part a:

Exchange rate = 1.25 Solaris/USD

We will divide the each item by 1.25 to determine the equivalent amount in USD

Assets = Solaris 52,000 / 1.25 = USD 41,600.00

Debt = Solaris 26,000 / 1.25 = USD 20,800.00

Equity = Solaris 26,000 / 1.25 = USD 20,800.00

Balance sheet looks like below:

Balance Sheet
Assets	41,600.00	Debt	20,800.00
		Equity	20,800.00
Total assets	41,600.00	Total liabilities and equity	41,600.00

Sub-part b:

Exchange rate = 1.3 Solaris/USD

We will divide the each item by 1.25 to determine the equivalent amount in USD

Assets = Solaris 52,000 / 1.3 = USD 40,000.00

Debt = Solaris 26,000 / 1.3 = USD 20,000.00

Equity = Solaris 26,000 / 1.3 = USD 20,000.00

Balance sheet looks like below:

Balance Sheet
Assets	40,000.00	Debt	20,000.00
		Equity	20,000.00
Total assets	40,000.00	Total liabilities and equity	40,000.00

Sub-part c:

Exchange rate = 1.12 Solaris/USD

We will divide the each item by 1.12 to determine the equivalent amount in USD

Assets = Solaris 52,000 / 1.12 = USD 46,428.57

Debt = Solaris 26,000 / 1.12 = USD 23,214.29

Equity = Solaris 26,000 / 1.12 = USD 23,214.29

Balance sheet looks like below:

Balance Sheet
Assets	46,428.57	Debt	23,214.29
		Equity	23,214.29
Total assets	46,428.57	Total liabilities and equity	46,428.57