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Adamantine Architectonics consists of a U

Finance

Adamantine Architectonics consists of a U.S. parent and wholly owned subsidiaries in Malaysia (A-Malaysia) and Mexico (A-Mexico). Selected portions of their non-consolidated balance sheets. translated into U.S. dollars. are shown in the popup window. What are the debt and equity proportions in Adamantine's consolidated balance sheet? 
 Data Table 
A-Malaysia (in ringgits)                                            A-Mexico (in pesos)

Long-term debt    RM12,300,000                          Long-term debt       Ps17,250,000 Shareholders' equity   RM18,040,000                   Shareholders' equity Ps72,450,000 Adamantine Architectonics (non-consolidated)

Investment in subsidiaries (US dollars):              Parent long-term debt      $12,000,000

in A-Malaysia        $4,400,000                             Common stock $4,000,000

in A-Mexico           $6,300,000                             Retained earnings $15,000,000

Current exchange rates

Malaysian ringgit per dollar      RM4.10/$

Mexican pesos per dollar         Ps11.50/$ 
 

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Computation of the debt and equity portions:-

Convert debt of subsidiaries into holding company currency.

A-Malaysia debt = 12,300,000 / 4.10

= $3,000,000

A-Mexico debt = 17,250,000 / 11.50

= $1,500,000

Total debt = A-Malaysia debt + A-Mexico debt + Parent long term debt

= $3,000,000 + $1,500,000 + $12,000,000

= $16,500,000

Total equity = Common stock + Retained earnings

= $4,000,000 + $15,000,000

= $19,000,000

Total capital =Total debt + Total equity

= $16,500,000 + $19,000,000

= $35,500,000

Debt portion = Total debt / Total capital

= $16,500,000 / $35,500,000

= 46.48%

Equity portion = Total equity / Total capital

= $19,000,000 / $35,500,000

= 53.52%