Albert Inc., franchisor, entered into a franchise agreement with Michael, franchisee on July 1, 2021. The initial franchisee fees agreed upon is P5,950,000, of which P1,050,000 is payable upon signing and the balance to be covered by a noninterest - bearing note payable in four equal annual installments. It was agreed that the down payment is not refundable, notwithstanding lack of substantial performance of services by franchisor. Probability of collection is unlikely. The following expenses were incurred: Direct cost: Initial services. P1,645,000 and Continuing services, P167,300; Indirect costs: Initial services, P448,000 and Continuing services, P63,000. Michael has estimated that he can borrow loan at the rate of 12%. The franchise commenced its operations on July 31, 2021. Continuing franchise fee is equal to 5% of its monthly gross sales. Michael reported gross sales of P6,650,000 for the month. When Michael prepares its financial statements on August 31, 2021, how much is the net income to be reported? PV factor 3.04