The mineral rights owned by Saypal have increased in value since the date of acquisition and were worth $928,600 at December 31, Year 7. On January 2, Year 5, Paypal sold equipment to Saypal for $540,000. The equipment had a carrying amount of $432,000 at the time of the sale. The remaining useful life of the equipment was 5 years. The Year 7 opening inventories of Paypal contained $504,000 of merchandise purchased from Saypal during Year 6. Saypal had recorded a gross profit of $201,600 on this merchandise. . During Year 7, Saypal's sales to Paypal totalled $1,004,000. These sales were made at a gross profit rate of 35%. Paypal's ending inventory contains $304,000 of merchandise purchased from Saypal. . The Year 7 opening inventories of Saypal contained $300,000 of merchandise purchased from Paypal during Year 6. Paypal had recorded a gross profit of $75,000 on this merchandise. During Year 7, Paypal's sales to Saypal totalled $800,000. These sales were made at a gross profit rate of 25%. Saypal's ending inventory contains $55,000 of gross profit recorded by Paypal. On January 2, Year 5, Paypal issued 8%, 7 year bonds with a face value of $500,000 for $521,000. Interest is paid annually on December 31. On January 2, Year 6, Saypal purchased one-half of this issue on the open market at a cost of $238,000. Other expenses include depreciation expense. Tax allocation will be at a rate of 40%. Required: 1. Calculate acquisition differential and goodwill.