Question

1. Hot Coffee has been leasing a store to sell their custom coffee mugs. They purchased and installed cabinets, shelves, and a counter to display and sell the mugs. What is the test used to determine if something is a fixture? Are these items considered personal property or fixtures? Will they belong to Hot Coffee or to the landlord when the lease expires? If Hot Coffee and the landlord decided to each contribute 50% to the purchase of a new location for the Hot Coffee business, what are two of the options they could use to buy the property together? What are the consequences for each option?

Answer 1

The test used for check and verify the items at the shop are C test which reveals the rate of defect in the end items with range of accuracy. It helps to find the number of items which are accurate to fit, in size, shape, etc.

eventhough the items were purchased by owners to the shop these items do not considered as personal property and considered as the shop property only. Once the lease is completed the fixtures and all fitted furniture contributed by Hot coffee belongs to hot coffee only, but not belongs to the landlord.

if both of these ready to establish a new venture at 50%, then they need to contribute the fixed investment and investments on variable things. The contribution for land or lease will be done by one party, and the construction, other furniture and fittings are done by another party. The consequnces are:

1. what is the proportionate of fixed and variable cost in total costs?
2. if one is higher than other, how it divided or shared?
3. depreciation issues at preparation of accounts and the funds belcongs to whom?

these are the major questions and problems raised between the two parties.