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Pacific Inc. acquires all of the voting stock of Skye Company for $300 million in cash. Skye's balance sheet at the date of acquisition is

  1. Pacific Inc. acquires all of the voting stock of Skye Company for $300 million in cash. Skye's balance sheet at the date of acquisition is as follows (in millions):

    Skye Company

    Assets

    Liabilities & equity

    Current assets

    $ 75

    Current liabilities

    $ 80

    Land, buildings & equipment, net

    1,200

    Long-term liabilities

    1,500

    Capital stock

    100

    Retained deficit

    (400)

    Accumulated other comprehensive income

    10

    _____

    Treasury stock

    (15)

    Total assets

    $1,275

    Total liabilities & equity

    $1,275

    Skye's land, buildings & equipment have a fair value of $1,000 million. Skye's other assets and liabilities are reported at amounts that approximate fair value. Skye has unreported identifiable intangibles with a fair value of $100 million that meet the criteria for capitalization. Now assume Skye elects to use pushdown accounting at the date of acquisition. What is its credit to Pushdown Capital, on its own books?

    A.

    $205 million

    B.

    $605 million

    C.

    $415 million

    D.

    $215 million

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