32. Compute Mary’s income or deductions for 2015 using (1) the cash basis and (2) the accrual… 1 answer below »

32.              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.

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

c.      In June 2015, Mary paid $7,200 for an office equipment service 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 furniture has an MACRS cost recovery period of seven years. Mary did not make the § 179 election and elected not to take additional first-year depreciation.

 

 

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