The following items relate to the acquisition of a new machine by Bongabon Corporation in 2020:

Invoice price of machinery P 2,000,000

Cash discount not taken 40,000

Freight on new machine 10,000

Cost of removing the old machine 12,000

Loss on disposal of the old machine 150,000

Gratuity paid to operator of the old machine who was laid off 70,000

Installation cost of new machine 60,000

Repair cost of new machine damaged in the process of installation 8,000

Testing costs before machine was put into regular operation 15,000

Salary of engineer for the duration of the trial run 40,000

Operating cost during first month of regular use 250,000

Cash allowance granted because the new machine proved to be of inferior quality 100,000

How much should be recognized as cost of the new machine?