Pharma Company (Pharma) is a pharmaceutical company operating in Winnipeg. It is developing a new drug for treating multiple sclerosis (MS). On January 1, Year 3, Benefit Ltd. (Benefit) signed an agreement to guarantee the debt of Pharma and guarantee a specified rate of return to the common shareholders. In return, Benefit will obtain the residual profits of Pharma. After extensive analysis, it has been determined that Pharma is a controlled special-purpose entity and Benefit is its sponsor.

The balance sheets (in millions) of Benefit and Pharma on January 1, Year 3, were as follows:

	Benefit			Pharma
	Carrying Amount			Carrying Amount			Fair Value
Current assets	$	490		$	90		$	90
Property, plant, and equipment		720			240			250
Intangible assets		130			100			150
	$	1,340		$	430		$	490
Current liabilities	$	305		$	220		$	220
Long-term debt		645			220			225
Common shares		90			1
Retained earnings		300			(11)
	$	1,340		$	430

An independent appraiser determined the fair values of Pharmas non-current assets. The appraiser was quite confident of the appraised value for the property, plant, and equipment but had some reservations in putting a specific value on the intangible assets.

Required:

Prepare a consolidated balance sheet at January 1, Year 3, assuming that the agreement between Benefit and Pharma established the following fair values for the common shares of Pharma: (Enter your answers in millions of dollars. Leave no cells blank - be certain to enter "0" wherever required. Omit $ sign in your response.)

(a) $45 million

(b) $40 million

(c) $55 million

Pharma Company
Consolidated Balance Sheet at January 1, Year 3
(in millions)
	(a)		(b)		(c)
Current assets	$		$		$
Property, plant, and equipment
Intangible assets
Goodwill
	$		$		$
Current liabilities	$		$		$
Long-term debt
Common shares
Retained earnings
Non-controlling interest
	$		$		$