Confused about ccounting question on deferred revenue and DTA

I came across the following accounting question about SaaS companies and can't wrap my head around the provided answer, would appreciate it if someone could shed some light on their reasoning.

Q: "Let’s say that I have a SaaS business of some kind. I have two options: either pay me $12 a month for my software or pay me $120 and get access to my software for a year. Let’s say a smart customer comes along and takes advantage of the discount and buys access for the year. Walk me through how I record that on the three statements at time zero?"

A: "So, at time zero, when the customer pays $120 for the year of access, no services have yet been rendered. Instead, we have deferred revenue of $120. But what you need to keep in mind here is we still must contend with cash taxes. So, on the income statement, we aren’t going to do anything at time zero as we haven’t really “earned” this revenue yet. However, on the cashflow statement we’re going to do two things. First, we create a deferred tax asset (DTA) to recognize the fact that we’ve paid cash taxes ($120 * 20% = $24) on this revenue, but that these taxes were paid on revenue we haven’t yet “earned”. You can kind of think of this DTA as being like a bucket we put $24 into that we’ll reduce down proportionally as we recognize revenue over the next year. Because this DTA is (obviously) a current asset this is a use of cash and decreases our cash within CFO so we would put -$24 here. 

Second, we have deferred revenue of $120 that we’ll be recognizing over the next year. Deferred
revenue is a current liability and therefore is a source of cash, so this will be +120. Therefore, our ending cash balance on the CFS is up $96 (all the changes occurred within CFO). On the balance sheet we have cash up $96 and a DTA (an asset, obviously) of $24, which makes our assets up $120. On the liabilities side we have deferred revenue, which is $120. So, we’re in balance."

I understand that tax accounting is cash-based but how can they determine your tax basis if you don't know yet what your gross margin will be, it doesn't sound right that you'd be taxed on $120 of revenue. Will they look at historicals and assume a specific gross margin to determine the tax amount?

In the guide, the question below comes after: 

Q:"So, we’ve handled recording our lump sum of deferred revenue at time zero. Now what
happens each month? Can you walk me through the three statements for that?"

A:" So, a customer paid us $120 upfront for access to software for a year. Therefore, we’ll be recognizing revenue of $10 each month. On the income statement, we’ll have revenue of $10 and net income of $8 (assuming a 20% tax rate).

On the cashflow statement, we’ll start with $8 at the top from net income. However, the revenue for this month is non-cash as we were already paid $120 upfront at time zero, which we recorded as deferred revenue. Therefore, we need to minus the $10 earned this month from deferred revenue within CFO. Since this is a current liability, taking off $10 from this is a use of cash and thus brings our cashflow down $10, which will give us -$2 overall. But remember we also have the DTA. Obviously, the amount of “tax” we paid on the income statement was $2 for this month, but we already paid $24 in tax at time zero. So, we’ll take $2 off of our DTA, which (given that it’s a current asset) is a source of cash. Therefore, on the cashflow statement we have $8 in net income, -$10 from a decline in deferred revenue, and $2 from the decline in the DTA, which leaves us with no change on the cashflow statement.

On the balance sheet, cash at the top is zero. However, our DTA declined by $2 (the amount of taxes for this month), so assets are down $2. On the liabilities side we have deferred revenue (a liability) down $10, but within shareholders’ equity we have $8 from net income. Thus, liabilities and shareholders’ equity are down $2 overall. So, we’re in balance."

Again, here they are assuming 100% gross margin and the accounting works out because previously they assumed taxes were paid on revenue, rather than pre tax income which does not sound right.