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Exercise 12-24 (Algo) Equity method, partial year (L012-6, 12-7] On July 1, 2021. Gupta Corporation bought 20% of the outstanding common stock of VB Company for $120 million cash giving Gupta the ability to exercise significant influence over VB's operations. At the date of acquisition of the stock, VB's net assets had a total fair value of $520 million and a book value of $300 million. Of the $220 million difference, $48 million was attributable to the appreciated value of Inventory that was sold during the last half of 2021. $150 million was attributable to buildings that had a remaining depreciable life of 15 years, and $22 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 $45 million and declared and paid cash dividends of $40 million $300 milion Cations. At the non stock of VB 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare all appropriate journal entries related to the investment during 2021, assuming Gupta accounts for this investment by the equity method. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50).) View transaction ist Journal entry worksheet Record the purchase of VB company shares for $120.0 million. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal Required 1 Required 2 > Journal entry worksheet Record the Gupta Corporation share of VB company net income. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal Required 1 Required 2 > Journal entry worksheet Record the cash dividend of 20% on shares held. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal Required 1 Required 2 > Journal entry worksheet Record the amortization of the differential. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal Required 1 Required 2 > Reqymy 1 Required 2 Determine the amounts to be reported by Gupta. (Amounts to be deducted, including losses and cash outflows, should be indicated with a minus sign. Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50).) Sin millions a. Investment in Gupta's December 31, 2021. balance sheet b. Investment revenue (loss) in Gupta's 2021 income statement c. Investing activities in Gupta's 2021 statement of cash flows Journal entry worksheet Record the Gupta Corporation share of VB company net income. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal Required 1 Required 2 > Journal entry worksheet Record the cash dividend of 20% on shares held. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal Required 1 Required 2 > Journal entry worksheet Record the amortization of the differential. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal Required 1 Required 2 > Reqymy 1 Required 2 Determine the amounts to be reported by Gupta. (Amounts to be deducted, including losses and cash outflows, should be indicated with a minus sign. Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50).) Sin millions a. Investment in Gupta's December 31, 2021. balance sheet b. Investment revenue (loss) in Gupta's 2021 income statement c. Investing activities in Gupta's 2021 statement of cash flows
