Garnet Corporation has assets worth $700,000 with an adjusted basis of $315,000. Pearl Corporation would like to acquire all of Garnet's assets in a Type C reorganization in exchange for $450,000 of voting stock, $125,000 of cash, and assumption of Garnet's liabilities of $125,000. All stock received by Garnet will be distributed to its shareholders, and Garnet will then liquidate. Which, if any, statement regarding this transaction is correct?

a. Garnet will realize a gain of $385,000 and recognize a gain of $0. b. Garnet will realize a gain of $385,000 and recognize a gain of $125,000. c. Garnet will realize a gain of $385,000 and recognize a gain of $150,000. d. Garnet will realize a gain of $385,000 and recognize a gain of $385,000. e. None of the above