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LMN Software develops cloud-based applications. Financial transactions for 2023 are as follows: Transactions (in $ millions) Amount Cash Sales 95.0 Credit Sales 45.0 Cash Payments
- LMN Software develops cloud-based applications. Financial transactions for 2023 are as follows:
Transactions (in $ millions) | Amount |
Cash Sales | 95.0 |
Credit Sales | 45.0 |
Cash Payments | 60.0 |
Accounts Receivable | 30.0 |
R&D Expenses | 20.0 |
Estimated Future Bug Fix Costs | 8.0 |
- Requirements:
- Prepare LMN Software's income statement for 2023 using the modified cash basis.
- Calculate net income considering the conservatism principle.
- Discuss the impact of estimated future bug fix costs on financial statements.
- Analyze the treatment of accounts receivable and R&D expenses under the conservatism principle.
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Principles of Auditing and Other Assurance Services
Authors: Ray Whittington, Kurt Pany
19th edition
978-0077804770, 78025613, 77804775, 978-0078025617
