ABC Ad Agency provides marketing solutions. Financial transactions for 2023 are provided below:

Transactions (in $ millions)	Amount
Cash Receipts	70.0
Credit Sales	35.0
Cash Payments	45.0
Accounts Receivable	18.0
Operating Expenses	30.0
Estimated Campaign Failures	6.0

Requirements:

• Prepare ABC Ad Agency's income statement for 2023 using the modified cash basis.
• Calculate net income considering the conservatism principle.
• Discuss the impact of estimated campaign failures on financial statements.
• Analyze the treatment of accounts receivable and operating expenses under the conservatism principle.