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Amazon.com, Inc. is analyzing its financial performance for 2023. The transactions recorded are: Transactions (in $ millions) Amount Cash Sales 500,000 Credit Sales 250,000 Cash

Amazon.com, Inc. is analyzing its financial performance for 2023. The transactions recorded are:

Transactions (in $ millions)

Amount

Cash Sales

500,000

Credit Sales

250,000

Cash Payments

300,000

Accounts Receivable

120,000

Inventory Purchases

200,000

Estimated Product Returns

40,000

Requirements:

  • Prepare Amazon.com, Inc.'s income statement for 2023 using the modified cash basis.
  • Calculate net income considering the conservatism principle.
  • Discuss the impact of estimated product returns on financial statements.
  • Analyze the treatment of accounts receivable and inventory purchases under the conservatism principle.

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