Che Paper Corp. purchased 70% of the outstanding shares of Sand Ltd. on January 1, Year 2, at a cost of $77,910. Paper has always used the equity method to account for its investments. On January 1, Year 2, Sand had common shares of $50,000 and retained earnings of $23,000, and fair values were equal to carrying amounts for all its net assets, except inventory (fair value was $3,600 less than carrying amount) and equipment (fair value was $10,800 greater than carrying amount). The equipment, which is used for research, had an estimated remaining life of six years on January 1, Year 2. The following are the financial statements of Paper Corp. and its subsidiary Sand Ltd. as at December 31, Year 5: BALANCE SHEETS At December 31, Year 5 Paper Cash Accounts receivable 38,000 Note receivable Inventory 72,000 Equipment (net) 240,000 Land 167,000 Investment in Sand 119,721 $636,721 Bank indebtedness $124,910 Accounts payable 58,000 Notes payable 30,700 Common shares 150,000 Retained earnings 273,111 $636,721 Sand $ 14,000 27,100 30,700 46,000 78,000 34,000 $229,800 $ 49,800 50,000 130,000 $229,800 Sand $ 310,800 15,600 INCOME STATEMENTS For the year ended December 31, Year 5 Paper Sales $ 814,000 Management fee revenue Equity method income from Sand 4,950 Interest income Gain on sale of land 834,550 Cost of sales 488,400 Research and development expenses 42.000 3,070 17,700 331,570 207,200 13.600 Check Sand $ 310,800 4,950 INCOME STATEMENTS For the year ended December 31, Year 5 Paper Sales $ 814,000 Management fee revenue 15,600 Equity method income from Sand Interest income Gain on sale of land 834,550 Cost of sales 488,400 Research and development expenses 42,000 Interest expense 13,200 Miscellaneous expenses 110,000 Income taxes 70,900 724,500 Net income $ 110,050 3,070 17,700 331,570 207,200 13,600 23,200 35,028 279,028 52,542 $ Additional Information . During Year 5, Sand made a cash payment of $1,300 per month to Paper for management fees, which is included in Sand's Miscellaneous expenses. . During Year 5, Paper made intercompany sales of $65,000 to Sand. The December 31, Year 5, inventory of Sand contained goods purchased from Paper amounting to $19,500. These sales had a gross profit of 35%. . On April 1, Year 5, Paper acquired land from Sand for $30,700. This land had been recorded on Sand's books at a carrying amount of $13,000. Paper paid for the land by signing a $30,700 note payable to Sand, bearing yearly interest at 10%. Interest for Year 5 was paid by Paper in cash on December 31, Year 5. This land was still being held by Paper on December 31, Year 5. The value of consolidated goodwill remained unchanged from January 1, Year 2, to July Year 5. On July 1, Year 5, a valuation was performed, indicating that the recoverable amount of consolidated goodwill was $3,900. During the year ended December 31, Year 5. Paper paid dividends of $80,000 and Sand paid dividends of $20,000. Sand and Paper pay taxes at a 40% rate. Assume that none of the gains or losses were capital gains or losses. Required: (a) Prepare, in good form, a calculation of goodwill and any undepleted acquisition differential as of December 31, Year 5. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Omit $ sign in your response.)