The Rameys Are Selling Their Home

question 13

Essay

The Rameys are selling their home.They did not set forth in the sales agreement whether the washer and dryer,the draperies,and a cherry corner cabinet that was in the dining room were to be included in the sale or whether they were planning to take these items with them.The buyers are claiming these items are fixtures and should stay with the house.The Rameys are claiming they are movable goods and they should not be part of the real estate that was sold.Define "fixtures," identify the tests used to determine whether an item is a fixture,and explain whether you think each of the contested items is a fixture and why or why not.

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Definitions:

Direct Approach

A method of preparing the statement of cash flows where major categories of gross cash receipts and payments are reported.

Indirect Approach

A method of communication or problem-solving that is not straightforward, often involving suggestion or implication rather than direct statements.

Investing Activities

Financial operations that involve the purchase and sale of long-term assets and other investments not considered cash equivalents.

Financing Activities

Refers to the transactions and events that affect long-term liabilities and equity of a company, including issuing debt, selling shares, and paying dividends.