Zapata Business Case Essay example

662 Words Oct 13th, 2014 3 Pages
BUSINESS CASE

Presented to the
Accountancy Department
De La Salle University

In partial fulfillment
Of the course requirements
In ACCTBA1 C39

Zapata, Kevin Bryan Z.
June 27, 2014

The date is November 12, 2013. You are the owner-manager of AZTEC Software- a single proprietorship owned company that is currently in financial difficulty. AZTEC needs a new large bank loans if it is to survive. You have been negotiating with several banks, but each has asked to see your 2013 financial statements which will be dated December 31, 2013. These statements will, of course, be audited. You are contemplating on what to do and now you intend to do the following to solve the situation.

“I am planning to buy Mega Software Co. for
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It is unethical to make a window dressing, meaning make a deceptively showing of debt to get favorable impressions, at the end a debt is always a debt. I am obligated to pay and settle my debts. In business, integrity and trust are vital elements for you to stay and survive. Character is very essential.

“I owe Apple Programming P400,000 due in 90 days. I know some people at Apple. If I were to sign a note payable and pay them 12 percent interest, they’d let me postpone this debt for a year or more.” If we will compute 12% interest of P400,000 that is about P48,000 which is quite a big amount that could help a lot for our operational expense considering Aztec is in financial difficulty. It can augment its expenses if you could turn interest expense to savings. Looking for a means or way to settle it early than its due date to avoid interest expense and penalties is much better. Scouting for banks who could give me lower interest rates, easy terms and requirements that could buy out my existing loans with higher interest rates is the best way to save.

“I own land that cost P500,000 but today is worth at least P2 million. I will show it at P2 million in my company’s statement of financial position, and that will increase my company’s total assets and owner’s equity by P1.5 million.” Real property is an asset and could help increase your owner’s equity/net worth. Since I am applying for a loan from a bank, collateral is usually required to

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