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Iris Company purchased land and a building on January 1
Iris Company purchased land and a building on January 1, 2014. Management’s best estimate of the value of the land was $100,000 and of the building $250,000. How-ever, management told the accounting department to record the land at $230,000 and the building at $120,000. The building is being depreciated on a straight-line basis over 20 years with no salvage value. Why do you suppose management requested this accounting treatment? Is it ethical?
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