Question
I am getting confused on why I am not balancing to my mini case: See below Here is the mini case info: Sundance Sporting Goods,
I am getting confused on why I am not balancing to my mini case: See below
Here is the mini case info:
Sundance Sporting Goods, Inc., is a U.S. manufacturer of high-quality sporting goodsprincipally golf, tennis, and other racquet equipment, and also lawn sports, such as croquet and badmintonwith administrative offices and manufacturing facilities in Chicago, Illinois. Sundance has two wholly owned manufacturing affiliates, one in Mexico and the other in Canada. The Mexican affiliate is located in Mexico City and services all of Latin America. The Canadian affiliate is in Toronto and serves only Canada. Each affiliate keeps its books in its local currency, which is also the functional currency for the affiliate. The current exchange rates are: $1.00 = CD1.25 = Ps3.30 = A1.00 = 105 = W800. The nonconsolidated balance sheets for Sundance and its two affiliates appear in the accompanying table.
You joined the International Treasury division of Sundance six months ago after spending the last two years receiving your MBA degree. The corporate treasure has asked you to prepare a report analyzing all aspects of the translation exposure faced by Sundance as a MNC. She has also asked you to address your analysis the relationship between the firms translation exposure and its transaction exposure. After performing a forecast of future spot rates of exchange, you decide that you must do the following before any sensible report can be written.
Sundance, Inc. | Mexican | Canadian | ||||
(Parent) | Affiliate | Affiliate | ||||
Assets | ||||||
Cash | $ 1,500 | Ps 1,420 | CD 1,200 | |||
Accounts receivable | 2,500 | 2800 | 1,500 | |||
Inventory | 5,000 | 6,200 | 2,500 | |||
Investment in Mexican affiliate | 2,400 | |||||
Investment in Canadian affiliate | 3,600 | |||||
Net fixed assets | 12000 | 11,200 | 5,600 | |||
Total Assets | $ 27,000 | Ps 21,620 | CD 10,800 | |||
Liabilities and Net Worth | ||||||
Accounts payable | 3,000 | PS 2,500 | CD 1,700 | |||
Notes payable | 4000 | 4,200 | 2,300 | |||
Long-term debt | 9,000 | 7,000 | 2,300 | |||
Common stock | 5,000 | 4,500 | 2,900 | |||
Retained earnings | 6,000 | 3,420 | 1,600 | |||
Total liabilities and net worth | $ 27,000 | Ps 21,620 | CD 10,800 |
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