Paul, franchisor, entered into a five-year franchise agreement with Anton, franchisee, on July 1, 2025. The total franchise fee agreed upon is P550,000, of which P50,000 is payable upon signing and the balance is covered by a non-interest-bearing note payable in four equal annual installments. It was agreed that the down payment is not refundable. The direct franchise cost incurred was P325,000. The management of Paul has estimated that they can borrow a loan of this type at the rate of 12%. The franchisee commenced its operations on July 31, 2025. The contract provides that the franchisee has the right to use the entity's intellectual property as it exists at the point in time at which the franchise is granted. How much is the net income (loss) to be reported on July 31, 2025? (Use PV factor of 3.04) 108,800 105,000 433,800 430,000