ABC Law Firm offers legal representation. Financial transactions for 2023 are summarized below:

Transactions (in $)	Amount
Cash Receipts	200,000
Accounts Receivable Collected	25,000
Cash Payments	150,000
Accounts Payable Paid	30,000
Rent Expense	20,000

Requirements:

• Prepare ABC Law Firm's income statement for 2023 using the modified cash basis.
• Calculate the net income, considering cash receipts, collections from accounts receivable, and cash payments.
• Discuss the treatment of rent expense and payments to accounts payable under the modified cash basis.
• Analyze the impact of including accounts receivable collected on financial reporting.
• Recommend strategies to optimize cash flow and reduce operating expenses.