# Compute Marys income or deductions for 2022 using (1) the cash basis and (2) the accrual basis for each of

## Question:

Compute Mary’s income or deductions for 2022 using (1) the cash basis and (2) the accrual basis for each of the following.

a. In May 2022, Mary paid a license fee of \$1,200 for the period June 1, 2022, through May 31, 2023.

b. In December 2022, Mary collected \$10,000 for January 2023 rents. In January 2022, Mary collected \$2,000 for December 2022 rents.

c. In June 2022, Mary paid \$7,200 for an office equipment service contract for the period July 1, 2022, through December 31, 2023.

d. In June 2022, 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 a 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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Related Book For

## South Western Federal Taxation 2023 Comprehensive Volume

ISBN: 9780357719688

46th Edition

Authors: Annette Nellen, Andrew D. Cuccia, Mark Persellin, James C. Young

Question Details
Chapter # 16- Accounting Periods and Methods
Section: Discussion Questions
Problem: 41
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