Exercise 12-24 (Algo) Equity method, partial year [LO12-6, 12-7] On July 1, 2021, Gupta Corporation bought 20% of the outstanding common stock of VB Company for $100 million cash, giving Gupta the ability to exercise significant influence over VBs operations. At the date of acquisition of the stock, VBs net assets had a total fair value of $450 million and a book value of $200 million. Of the $250 million difference, $35 million was attributable to the appreciated value of inventory that was sold during the last half of 2021, $165 million was attributable to buildings that had a remaining depreciable life of 15 years, and $50 million related to equipment that had a remaining depreciable life of 10 years. Between July 1, 2021, and December 31, 2021, VB earned net income of $35 million and declared and paid cash dividends of $30 million. Required: 1. Prepare all appropriate journal entries related to the investment during 2021, assuming Gupta accounts for this investment by the equity method. 2. Determine the amounts to be reported by Gupta.