3 3 Moon Corporation and Star 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 balance sheets for the two companies are as follows at July 31, 2011: Required: a. Assume that you are a banker and that each company has applied to you for a 90- day loan of $12,000. Which would you consider to be the more favorable prospect? Explain your answer fully. b. Assume that you are an investor considering purchasing all the capital stock of one or both of the companies. For which business would you be willing to pay the higher price? Do you see any indication of a 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.) (10 Points) 4:31 .. AA forms.office.com consider to be the more favorable prospect? Explain your answer fully. b. Assume that you are an investor considering purchasing all the capital stock of one or both of the companies. For which business would you be willing to pay the higher price? Do you see any indication of a 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.) (10 Points) Assets Cash Account Rece Land Bulding Ocean MOON CORPORATION BALANCE SHEET JULY 31, 2011 Liis Equity $18.000 26.000 37.200 onda 30.000 AP To Stock Calo 560.000 Rudam St20.400 Total $12.00 2.600 3 22.000 Total 2.400 512000 Ats STAR CORPORATION BALANCE SHEET JULY 31, 2011 L'Equity 4.300 3.000 5.000 50,000 Acourse 12,000 Totatoes Accounts Rece Land Building Once Emer 5 22.400 43 200 366.600 Catalok 72.000 4400 116.00 $12.00 Total S162.400 B