Peppa Pig Inc. acquired 100,000 ordinary shares of Daddy Pig Corp. for P5 per share and 250,000 ordinary shares of Mommy Pig Inc. for P10 per share on January 2, 2016. Both Daddy and Mommy Pig have 1,000,000 ordinary shares outstanding. The book values of the net assets of Daddy Pig and Mommy Pig on the acquisition date were P4,500,000 and P9,000,000, respectively. The fair values of the net assets of both Daddy Pig and Mommy Pig approximated their book values on the acquisition date, except for one of Mommy Pig's depreciable asset having a remaining life of 5 years, which was understated by P500,000. Both securities are being held as long term investments. Your investigation revealed the following changes in Retained Earnings of Daddy Pig and Mommy Pig for 2016 and 2017 based on their respective audited financial statements: Daddy Pig Corp. Mommy Pig Inc. Retained earnings (Deficit), 1/1/16 P2,000,000 P350,000) Cash dividends, 2016 (250,000) Profit for 2016 400,000 650,000 Retained earnings, 12/31/16 P2,150,000 P300,000 Cash dividends, 2017 (300,000) (100,000) Profit for 2017 600,000 150,000 Retained Earnings, 12/31/17 P2,450,000 P250,000 Market values of shares: 12/31/16 P7.00 per share P12.00 per share Market values of shares: 12/31/17 6.50 per share 15.00 per share