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PQR Electronics sells home appliances. Financial transactions for 2023 are as follows: Transactions (in $) Amount Cash Sales 250,000 Credit Sales 80,000 Cash Payments 180,000
- PQR Electronics sells home appliances. Financial transactions for 2023 are as follows:
Transactions (in $) | Amount |
Cash Sales | 250,000 |
Credit Sales | 80,000 |
Cash Payments | 180,000 |
Accounts Receivable | 40,000 |
Inventory Purchases | 120,000 |
Estimated Inventory Obsolescence | 10,000 |
- Requirements:
- Prepare PQR Electronics' income statement for 2023 using the modified cash basis.
- Calculate net income considering the conservatism principle.
- Discuss the impact of estimated inventory obsolescence on financial statements.
- Analyze how conservatism principle affects the treatment of accounts receivable.
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