OPQ Pharma produces prescription drugs. Financial transactions for 2023 are as follows:

Transactions (in $ millions)	Amount
Cash Sales	130.0
Credit Sales	50.0
Cash Payments	85.0
Accounts Receivable	40.0
Research and Development	35.0
Estimated Drug Recalls	12.0

Requirements:

• Prepare OPQ Pharma's income statement for 2023 using the modified cash basis.
• Calculate net income considering the conservatism principle.
• Discuss the impact of estimated drug recalls on financial statements.
• Analyze the treatment of accounts receivable and research and development expenses under the conservatism principle.