1. ACCTBA1 INDIVIDUAL BUSINESS CASE
1
ST
Term, Academic Year 2013-2014
Williams, J., Haka, S., Bettner, M., & Carcello, J. (2012)
Financial Accounting, 15
th
edition, McGraw-Hill Irwin (with modifications)
Galaxy Corporation and Universal Corporation are in the same line of business and both were recently organized,
so it may be assumed that the recorded costs for assets are close to current market values. The statement of
financial position of two companies are as follows as of July 31, 2012.
Galaxy Corporation
Statement of Financial Position
July 31, 2012
Assets Liabilities & Owner’s Equity
Cash P 900,000 Liabilities:
Accounts Receivable 1,300,000 Notes Payable (due in 60 days) P 620,000
Land 1,860,000 Accounts Payable 480,000
Building 1,900,000 Total Liabilities P1,100,000
Office Equipment 60,000 Owner’s Equity:
Galaxy, Capital P4,920,000
Total Assets P6,020,000 Total Liabilities & Owner’s Equity P6,020,000
Universal Corporation
Statement of Financial Position
July 31, 2012
Assets Liabilities & Owner’s Equity
Cash P240,000 Liabilities:
Accounts Receivable 480,000 Notes Payable (due in 60 days) P1,120,000
Land 4,800,000 Accounts Payable 2,160,000
Building 3,000,000 Total Liabilities P3,280,000
Office Equipment 600,000 Owner’s Equity:
Universal, Capital 5,840,000
Total Assets P9,120,000 Total Liabilities & Owner’s Equity P9,120,000
Instructions:
a. Assume you are a banker and that each company has applied for a 90day loan of P600,000. Which would you
consider to be the more favorable prospect? Explain your answer fully.
b. Assuming that you are considering purchasing one of the companies. For which business would you be willing
to pay the higher price? Do you see any indication of financial crisis that you might face shortly after buying either
company? Explain you answer fully. (For either decision, additional information would be useful, but you are to
reach your decision on the basis of the information available).

2. Format:
 Short bond paper
 Double spaced
 One inch margin in all sides
 Minimum of two pages (not including the cover page)
 Font: Arial 12
 Cover page:
Deadline: July 1, 2013
BUSINESS CASE
Presented to the
Accountancy Department
De La Salle University
In partial fulfillment
Of the course requirements
In ACCTBA1 (sec)
Surname, First Name, M.I.
Date