On December 31, 2020, Loving Company showed shareholder’s equity of P5,000,000. The share capital of P3,000,000 remained unchanged during the year. The transactions which affected the equity were: An...

On December 31, 2020, Loving Company showed shareholder’s equity of P5,000,000. The share capital of P3,000,000 remained unchanged during the year. The transactions which affected the equity were: An adjustment of retained earnings, beg. for under depreciation: P200,000; gain on sale of treasury shares: P300,000; cash dividends declared: P400,000; net income for the current year: P800,000. What is the retained earnings balance on January 1, 2020? *