ABC Manufacturing Inc. produces machinery components. Financial transactions for 2023 are provided below:

Transactions (in $ millions)	Amount
Cash Sales	70.0
Credit Sales	30.0
Cash Payments	50.0
Accounts Payable Paid	10.0
Raw Materials Purchases	25.0

Requirements:

• Prepare ABC Manufacturing Inc.'s income statement for 2023 using the modified cash basis.
• Calculate the net income, considering cash sales, credit sales, and cash payments.
• Discuss the treatment of raw materials purchases and payments to accounts payable under the modified cash basis.
• Analyze the impact of including credit sales on financial reporting.
• Recommend strategies to optimize cash flow and manage working capital effectively.