ABC Health Services provides medical care. Financial transactions for 2023 include:

Transactions (in $ millions)	Amount
Patient Service Revenue	65.0
Accounts Receivable	25.0
Cash Payments	40.0
Accounts Payable	18.0
Medical Supplies Purchases	30.0
Estimated Bad Debts	7.0

Requirements:

• Prepare ABC Health Services' income statement for 2023 using the modified cash basis.
• Calculate net income considering the conservatism principle.
• Discuss the impact of estimated bad debts on financial statements.
• Analyze the treatment of accounts receivable and medical supplies purchases under the conservatism principle.