Adamantine Architectonics. Adamantine Architectonics consists of a U.S. parent a

Question

Adamantine Architectonics. Adamantine Architectonics consists of a U.S. parent and wholly owned subsidiaries in Malaysia (A-Malaysia) and Mexio (A-Mexico). Selected portions of their non-consolidated balance sheets, translated into U.S. dollars, are shown in the popup window, 1. What are the debt and equity proportions in Adamantine's consolidated balance sheet? What is the debt proportion in Adamantine's consolidated balance sheet? % (Round to two decimal places.) What is the equity proportion in Adamantine's consolidated balance sheet? % (Round to two decimal places.) 1: Data Table A-Malaysia (accounts in ringgits) Long-term debt Shareholders' equity A-Mexico (accounts in pesos) RM12,950,000 og-term debt RM14,800,000 Shareholders PS25,300,000 PS80,500,000 ' equity Adamantine Architectonics (Nonconsolidated Balance SheetSelected Items Only) Investment in subsidiaries Parent long-term debt Common stock $18,000,000 5,000,000 16,000,000 $4,000,000 In A-Malaysia In A-Mexico 7,000,000 Retained eamings Current exchange rates Malaysia Mexico RM3.70$ PS11.50/S

Explanation / Answer

Convert debt of subsidaries into holding company currency.

A-Malaysia Debt = 12950000 / 3.7 = 3500000 $

A-Mexico Debt = 25300000 / 11.5 = 2200000 $

Now Add these two into holding company debt

Total debt = 3500000 + 2200000 + 18000000 = 23700000

When we are calculating equity part we dont add subsidaries equity because they are already incorporated in holding company's equity.

Total equity = 5000000 + 16000000 = 21000000

Capital = 23700000 + 21000000 = 44700000

Debt portion = 23700000 / 44700000 = 53.02%

Equity portion = 21000000 / 44700000 = 46.98%

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