On July 1, 2016, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $100 mil-lion cash. At the date of acquisition of the stock, VB's net assets had a total fair value of $350 million and a book value of $220 million. Of the $130 million difference, $20 million was attributable to the appreciated value of inventory that was sold during the last half of 2016. $80 million was attributable to buildings that had a remaining depreciable life of 10 years, and $30 million related to equipment that had a remaining depreciable life of 5 years. Between July 1, 2016, and December 31, 2016, VB earned net income of $32 million and declared and paid cash dividends of $24 million.

Required:

1. Prepare all appropriate journal entries related to the investment during 2016, assuming Gupta accounts for this investment by the equity method. 

2. Determine the amounts to be reported by Gupta:

a. As an investment in Gupta's December 31, 2016, balance sheet.

b. As investment revenue or loss in Gupta's 2016 income statement.

c. Among investing activities in Gupta's 2016 statement of cash flows.