On July 1, 2015 Kim Company acquired 20% of the outstanding ordinary shares of another entity for P5,000,000. The carrying amount of the acquired shares was P4,000,000. The excess of cost over carrying amount of the acquired shares was P4,000,000. The excess of cost over carrying amount attributable to an identifiable intangible asset which was undervalued on the investee's statement of financial position and which had a remaining useful life of 5 years. The invested reported net income of P6,000,000 for 2015 of which P4,000,000 was for the last 6 months of the year and paid cash dividends of P1,000,000 on ordinary shares and issued 10% stock dividends on December 31, 2015. What is the carrying amount of the investment in associate on December 31, 2015?

The answer is 5,500,000. Can someone please explain the solution? Thank you?