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 variable interest entity and Benefit is its primary beneficiary.
The balance sheets (in millions) of Benefit and Pharma on January 1, Year 3, were as follows:

An independent appraiser determined the fair values of Pharma€™s non-current assets. The appraiser was quite confident with 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:
(a) $25
(b) $20
(c) $35

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Benefi Pharma Carying amut Carrying unt Fair value Current assets Property, plant, and equipment Intangible assets S250 400 50 S700 S 50 80 20 $150 50 90 70 $210 $145 325 10 220 S700 S 60 120 60 125 Current liabilities Long-term debt Common shares Retained earnings (31) $150