Reference no: EM132053331

Question - Compute Mary's income or deductions for 2015 using (1) the cash basis and (2) the accrual basis for each of the following:

a. In May, 2015, Mary paid a license fee of $1,200 for the period June 1, 2015, through May 31, 2016.

b. In December 2015, Mary collected $10,000 for January 2016 rents. In Januart 2016, Mary collected $2,000 for December 2015 rents.

c. In June 2015, Mary paid $7,200 for an office equipment services contract for the period July 1, 2015 through December 31, 2016.

d. In June 2015, Mary purchased office furniture for $273,000. She paid $131,000 in cash and gave a $142,000 interest-bearing note for the balance. The office furnitue has an MACRS cost recovery period of seven years. Mary did not make the section 179 election and elected not to take additional first-year depreciation.