Joy Corp. is engaged in a research and development project to produce a new product. In the year ended December 31, 2016, the company spent P1,200,000 on research and concluded that there were sufficient grounds to carry the project on to its development stage and a further P750,000 had been spent on development. At that date management had decided that they were not sufficiently confident in the ultimate profitability of the project and wrote off all the expenditure to date to the income statement. In 2017 further direct development costs have been incurred of P800,000 and the development work is now almost complete with only an estimated P100,000 of costs to be incurred in the future. Production is expected to commence within the next few months. Unfortunately the total trading profit from sales of the new product is not expected to be as good as market research data originally forecasted and is estimated at only P1,500,000. Assuming the other criteria given in PAS 38 are met, how much should be capitalized as of December 31, 2017?