1. ACTBAS1 INDIVIDUAL BUSINESS CASE
1ST
Term, Academic Year 2013-2014
Williams, J., Haka, S., Bettner, M., & Carcello, J. (2012)
Financial Accounting, 15th
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
statements of financial position of the two companies as of July 31, 2012 are as follows:
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 P 1,100,000
Office Equipment 60,000 Owner’s Equity:
Galaxy, Capital 4,920,000
Total Assets P 6,020,000 Total Liabilities & Owner’s Equity P 6,020,000
Universal Corporation
Statement of Financial Position
July 31, 2012
Assets Liabilities & Owner’s Equity
Cash P 240,000 Liabilities:
Accounts Receivable 480,000 Notes Payable (due in 60 days) P 1,120,000
Land 4,800,000 Accounts Payable 2,160,000
Building 3,000,000 Total Liabilities P 3,280,000
Office Equipment 600,000 Owner’s Equity:
Universal, Capital 5,840,000
Total Assets P 9,120,000 Total Liabilities & Owner’s Equity P 9,120,000
Instructions:
a. Assume you are a banker and that each company has applied for a 90-day 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 your 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 2, 2013
BUSINESS CASE
Presented to the
Accountancy Department
De La Salle University
In partial fulfillment
Of the course requirements
In ACTBAS1 (sec)
Surname, First Name, M.I.
Date