Betancourt International has operations in Arrakis. The balance sheet for this d

Question

Betancourt International has operations in Arrakis. The balance sheet for this division in Arrakeen solaris shows assets of 35,000 solaris, debt in the amount of 13,500 solaris, and equity of 21,500 solaris.

a. If the current exchange ratio is 1.45 solaris per dollar, what does the balance sheet look like in dollars? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

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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 1.60 solaris per dollar, what does the balance sheet look like in dollars now? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

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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 1.30 solaris per dollar, what does the balance sheet look like in dollars now? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Balance Sheet Assets Liabilities Debt $ Equity Assets $ Total liabilities & equity $

Explanation / Answer

a)

b)

c)

Exchange rate ER 1.45 Assets Liabilities Debt $   9,310.34 Equity $ 14,827.59 Assets $ 24,137.93 Total Liability and equity $ 24,137.93

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