Reducing taxable income and income taxes

Reference no: EM13151823

Tones Company purchased a warehouse in la downtown district where land values are rapidly increasing. Gerald Carter, controller, and Wilma Ankara, financial vice-president, are trying to allocate the cost of the purchase between the land and the building. Noting that depreciation can be taken only on the building, Carter favors placing a very high proportion of the cost on the warehouse itself, thus reducing taxable income and income taxes. Ankara, his supervisor, argues that the allocation should recognize.

Reference no: EM13151823

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