Reference no: EM132550871

On July 1, 2021, Gupta Corporation bought 30% of the outstanding common stock of VB Company for $140 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 $390 million and a book value of $220 million. Of the $170 million difference, $22 million was attributable to the appreciated value of inventory that was sold during the last half of 2021, $110 million was attributable to buildings that had a remaining depreciable life of 15 years, and $38 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 $30 million and declared and paid cash dividends of $20 million.

Question 1: Journal entry for Record the amortization of the differential and

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