Mario Company, an SME, issued 70,000 common shares with a total market value of 1,750,000 to acquire all the net assets of Luigi Company in September 1, 2020. Mario Company's retained earnings prior to business combination amounted to P355,000 and incurred the following costs related to the merger: Legal fees Various indirect costs Consultancy fees Cost of issuing and printing stock certificates P 30,000.00 15,200.00 12,000.00 18,000.00 Luigi's assets, liabilities and equities before the business combination were as follows: Current assets Carrying Value 900,000.00 P Non-current Asset Liabilities Common stock Retained earnings 1,250,000.00 550,000.00 850,000.00 750,000.00 On September 1, 2020, the current assets of Luigi Company is undervalued by P300,000 while the non- current assets is overvalued by P150,000.