On January 3, 2007, Austin Corp. purchased 25% of the voting common stock of Gainsville Co., paying $2,000,000. Austin used the equity method to account for this investment.

At the time of the investment, Gainsville's total stockholders' equity was $6,000,000. Gainsville had franchise agreements with a fair market value of $400,000.

Austin gathered the following information about Gainsville's assets and liabilities:

 Life BV FMV Building 10 yrs. $ 400,000 $ 500,000 Equipment 5 yrs. $1,000,000 $1,300,000 

For all other assets and liabilities, book value and fair market value were equal.

1. Assuming that the franchise agreements are amortized over a period of five years, what is the total amortization for 2007, related to this investment?

2. What is the amount of Goodwill associated with this investment?

Please show your work!