Seperate select box for sub-categories for selected category

Hello,

I am very new to WordPress as well as coding and I am stuck with one of the form field, which has a select box for listing all categories and sub-categories (taxonomies) in it. But I would like a seperate select box for displaying sub-categories for the selected category dynamically.

Below is the code in functions.php:

function mytheme_get_categories($taxo, $selected = "", $include_empty_option = "", $ccc = "")
{
	$args = "orderby=name&order=ASC&hide_empty=0&parent=0";
	$terms = get_terms( $taxo, $args );

	$ret = '<select name="'.$taxo.'_cat" class="'.$ccc.'" id="'.$ccc.'">';
	if(!empty($include_empty_option)) $ret .= "<option value=''>".$include_empty_option."</option>";

	if(empty($selected)) $selected = -1;

	foreach ( $terms as $term )
	{
		$id = $term->term_id;

		$ret .= '<option '.($selected == $id ? "selected='selected'" : " " ).' value="'.$id.'">'.$term->name.'</option>';

		$args = "orderby=name&order=ASC&hide_empty=0&parent=".$id;
		$sub_terms = get_terms( $taxo, $args );	

		if($sub_terms)
		foreach ( $sub_terms as $sub_term )
		{
			$sub_id = $sub_term->term_id;
			$ret .= '<option '.($selected == $sub_id ? "selected='selected'" : " " ).' value="'.$sub_id.'">&nbsp; &nbsp;|&nbsp;  '.$sub_term->name.'</option>';
		}

	}

	$ret .= '</select>';

	return $ret;

}

and the code in post_new.php is as below:

<li><h2><?php echo __('Category', 'mytheme'); ?>:</h2>
        	<p><?php	echo mytheme_get_categories("ad_cat",
			!isset($_POST['ad_cat_cat']) ? (is_array($cat) ? $cat[0]->term_id : "") : $_POST['ad_cat_cat']
			, __("Select Category","mytheme"), "do_input"); ?></p>
</li>
<?php do_action('mytheme_after_category_li'); ?>

Any help is much appreciated as I have been trying to do this for over a week now.

Thank you.