Below You Will Find the Balance Sheet and Income Statement

question 16

Essay

Below you will find the balance sheet and income statement of a US Corp.'s foreign subsidiary at the end of its first year of operations.The following exchange rates were in effect during the period:
Jan.1,2012 - $1 = 1FC
Dec.31,2012 - $1.70 = 1FC
The average exchange rate during the period was $1.40=1FC.The common stock was issued on January 1,2012.
Assuming that the foreign currency is the functional currency,translate the financial statements into U.S.dollars.

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Definitions:

Debt Capital Structure

The composition of a company's liabilities and equity used to finance its operations and growth, particularly focusing on the proportion of debt used.

Target Capital Structure

The optimal mix of debt, equity, and other financing sources a company aims to achieve for financing its operations and growth.

Coupon Rate

The annual interest rate paid on a bond, expressed as a percentage of the face value, and received by the bondholders at specified intervals.

Flotation Costs

Expenses incurred by a company when it issues new securities, including underwriting fees, legal fees, and registration fees.