Pls explain in detail
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pls explain in detail
Transcribed Image Text:A pharmaceutical and financial investment company both have market value (total stock
value) of $500 million. Which statement is most correct?
a. They may have different net asset values because one company is more ethical than
the other.
O b. Both companies must have similar net asset value.
O c. They may have different net asset values because in accounting the fair value of stocks
used in the financial investment company is included on the GAAP balance sheet as an
asset yet the value of a patented drug developed by the pharmaceutical company is
NOT included.
O d. Both companies have the same tax liability.
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