Two real estate companies, Company X and Company Y (the parties) set up a separate vehicle...

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Two real estate companies, Company X and Company Y (the parties) set up a separate vehicle (Entity A) for the purpose of acquiring and operating a shopping center. The contractual arrangement between the parties establishes joint control of the activities that are conducted by Entity A. The main feature of Entity A's legal form is that the entity, not the parties has rights to the assets and obligations for the liabilities relating to the arrangement. Summary transactions of the joint arrangement for 2013 and 2014 are as follows: 2013: • Company X and Company Y contributed P10 million each for 40% interest. • Taxes and licenses paid amounted to P200,000. • Acquired office furniture and equipment on account, P2 million. Entity A acquired land at a cost of P3 million. . Constructed a building (shopping center) at a cost of P12 million. • Operating expenses for the year amounts to P1 million. • Rental income collected from the tenants, P5 million. • Net income or loss is distributed to the parties in accordance with their interest. 2014: • Operating expenses (including depreciation) incurred for the year, P500,000. Rental income collected for the year, P8 million. • • Declared and paid dividends, P3 million. Each venture receives a share of the income or loss from rental income net of operating expenses. a) What is the interest of Company X in Entity A for the year ended December 31, 2013? . b) What is the interest of Company Y in Entity A for the year ended December 31, 2014? Two real estate companies, Company X and Company Y (the parties) set up a separate vehicle (Entity A) for the purpose of acquiring and operating a shopping center. The contractual arrangement between the parties establishes joint control of the activities that are conducted by Entity A. The main feature of Entity A's legal form is that the entity, not the parties has rights to the assets and obligations for the liabilities relating to the arrangement. Summary transactions of the joint arrangement for 2013 and 2014 are as follows: 2013: • Company X and Company Y contributed P10 million each for 40% interest. • Taxes and licenses paid amounted to P200,000. • Acquired office furniture and equipment on account, P2 million. Entity A acquired land at a cost of P3 million. . Constructed a building (shopping center) at a cost of P12 million. • Operating expenses for the year amounts to P1 million. • Rental income collected from the tenants, P5 million. • Net income or loss is distributed to the parties in accordance with their interest. 2014: • Operating expenses (including depreciation) incurred for the year, P500,000. Rental income collected for the year, P8 million. • • Declared and paid dividends, P3 million. Each venture receives a share of the income or loss from rental income net of operating expenses. a) What is the interest of Company X in Entity A for the year ended December 31, 2013? . b) What is the interest of Company Y in Entity A for the year ended December 31, 2014?

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a Calculate the interest of Company X in Entity A for the year ended December 31 2013 Given that bot... View the full answer