Button-quail Corporation owned a 70% interest in Savannah Corporation at December 31, 2006, and, Button-quail's Investment in Savannah account had a balance of $3,900,000. Savannah's stockholders' equity on this date was as follows:

Capital stock, $10 par value...........................................................$3,000,000

Retained Earnings....................................................................... 2,400,000

Total Stockholders' Equity.............................................................$5,400,000

On January 1, 2007, Savannah issues 80,000 new shares of common stock to Button-quail for $16 each.

Question: Assuming that Savannah has no fixed assets, what is the amount of goodwill associated with the issuance of shares to Button-quail?

a. $38,176 b. $40,232 c. $41,302 d. $41,732