P6.19 Joint Operations P Co and T Co formed a special purpose entity Z with the sole purpose of acquiring its output of extracted minerals. P Co and T Co agreed on the contractual sharing of power that required unanimous consent on all strategic activities of Z. P Co and T Co provided financial guarantees to leaders of Z. By virtue of its rights to the assets of Z and its obligations for the liabilities of Z, P Co is a joint operator of Z and recognizes its share of the assets and liabilities of Z on its statement of financial position. 20x5 is the first year of operations for z Under the agreement, the sharing ratios are as follows: P Co T Co 5096 5096 5096 5096 Revenues Expenses Including taxes Fixed assets Inventory Account recelvables Cash 8096 2096 096 100% 5096 5096 5096 5096 Current liabilities.... Long term liabilities 80% 50% 20% 50% Management fee is paid to P Co for being the manager on the project, Management fee is the difference between the share of equity and the share of net assets attributable to P Co. Ignore tax effects on management fees P6.19 Joint Operations P Co and T Co formed a special purpose entity Z with the sole purpose of acquiring its output of extracted minerals. P Co and T Co agreed on the contractual sharing of power that required unanimous consent on all strategic activities of Z. P Co and T Co provided financial guarantees to leaders of Z. By virtue of its rights to the assets of Z and its obligations for the liabilities of Z, P Co is a joint operator of Z and recognizes its share of the assets and liabilities of Z on its statement of financial position. 20x5 is the first year of operations for z Under the agreement, the sharing ratios are as follows: P Co T Co 5096 5096 5096 5096 Revenues Expenses Including taxes Fixed assets Inventory Account recelvables Cash 8096 2096 096 100% 5096 5096 5096 5096 Current liabilities.... Long term liabilities 80% 50% 20% 50% Management fee is paid to P Co for being the manager on the project, Management fee is the difference between the share of equity and the share of net assets attributable to P Co. Ignore tax effects on management fees