Response to the following problem:
Computer Mary's income or deductions for 2012 using the (1) cash basis and (2) the accrual basis for each of the following:
(a.) In May 2012, Mary paid a licence fee of $1200 for the period June 1, 2012 through May 31, 2013.
(b) In December 2012, Mary collected $10,000 for January 2013 rents. In January 2013, Mary Collected $2,000 for December 2012 rents.
(c) In June 2012, Mary paid $7,200 for an office equipment service contract for the period July 1, 2012 through Dec. 31, 2013.
(d) In June 2012, Mary purchased office furniture for $273,000. She paid $131,000 in cash and gave $142,000 interest bearing note for the balance. The office furniture has an MARCS cost recovery period of 7 yrs. Mary did not make the 179 election and elected not to take additional first-year depreciation.