Use the data given in exercise SB-3. Assume that in November 2021, General Motors sold half its investment in \(\mathrm{ABC}\) to Toyota. The sale price was \(\$ 14\) million. Compute General Motors's gain or loss on the sale.

Exercise B-3

Suppose on February 1, 2020, General Motors paid \(\$ 41\) million for a \(40 \%\) investment in ABC Ltd., an auto parts manufacturer. Assume \(A B C\) earned net income of \(\$ 6\) million and paid cash dividends of \(\$ 2\) million during 2020.

1. What method should General Motors use to account for the investment in \(A B C\) ? Give your reason.

2. Journalize these three transactions on the books of General Motors. Show all amounts in millions of dollars, and include an explanation for each entry.

3. Post to the Long-Term Investment T-account. What is its balance after all the transactions are posted?