Compute Mary’s income or deductions for 2017 using (1) the cash basis and (2) the accrual basis for each of the following:
a. In May 2017, Mary paid a license fee of $1,200 for the period June 1, 2017, through May 31, 2018.
b. In December 2017, Mary collected $10,000 for January 2018 rents. In January 2018, Mary collected $2,000 for December 2017 rents.
c. In June 2017, Mary paid $7,200 for an office equipment service contract for the period July 1, 2017, through December 31, 2018.
d. In June 2017, 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.