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Two real estate companies, Lin and kid (the parties ) set up a separate Vehicle, LA, for the purpose of acquiring and operating a shopping

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Two real estate companies, Lin and kid (the parties ) set up a separate Vehicle, LA, for the purpose of acquiring and operating a shopping mall. The contractual arrangement between the parties establishes joint control of the activities that are conducted in LK. The legal form of LK is that LK, not the parties, has rights to the assets, and obligations for the liabilities, relating to the arrangement. The activities of the arrangement include the rental of the retail units, managing the car park, maintaining the mall and its equipment, such as escalators, and establishing the reputation and customer base for the mall as a whole. The terms of the contractual arrangement are such that: a. Entity LK owns the shopping mall. b. The liability of each party is limited to the unpaid amount of their capital contribution. c. The parties have the right to sell or pledge their interests in entity LK. d. Each party receives a share of the income from operating the shopping mall (which is the rental income net of the operating costs and expenses) in accordance with its interest in entity LK. Summary transactions of the joint arrangement are as follows: 2017 2018 Contributions - Lin P10 Million P - Contributions - Kid P10 Million P - Rental income 4 Million 5 Million Costs and expenses 2 Million 2 Million Dividends declared and paid 1 Million

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