On July 1, 2024, Gupta Corporation bought 25% 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 $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 2024, $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 five years. Between July 1, 2024, and December 31, 2024, 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 2024, assuming Gupta accounts for this investment by the equity method.

2) Determine the amounts to be reported by Gupta. ($ in millions)

a. Investment in Guptas December 31, 2024, balance sheet

b. Net investment revenue (loss) in Guptas 2024 income statement

c. Investing activities in Guptas 2024 statement of cash flows