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Johnson & Johnson is preparing its financial statements for 2023. The financial data includes: Transactions (in $ millions) Amount Cash Sales 800,000 Credit Sales 400,000
Johnson & Johnson is preparing its financial statements for 2023. The financial data includes:
Transactions (in $ millions) | Amount |
Cash Sales | 800,000 |
Credit Sales | 400,000 |
Cash Payments | 450,000 |
Accounts Receivable | 150,000 |
R&D Expenses | 300,000 |
Estimated Product Liability | 70,000 |
Requirements:
- Prepare Johnson & Johnson's income statement for 2023 using the modified cash basis.
- Calculate net income considering the conservatism principle.
- Discuss the impact of estimated product liability on financial statements.
- Analyze the treatment of accounts receivable and R&D expenses under the conservatism principle.
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