On July 1, 2018, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $100 million 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 2018, $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, 2018, and December 31, 2018, 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 2018, 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, 2018, balance sheet

b. As investment revenue or loss in Gupta's 2018 income statement

c. Among investing activities in Gupta's 2018 statement of cash flows