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XYZ Health Clinic provides medical services. Financial transactions for 2023 include: Transactions (in $ millions) Amount Patient Service Revenue 60.0 Accounts Receivable 15.0 Cash Payments

XYZ Health Clinic provides medical services. Financial transactions for 2023 include:

Transactions (in $ millions)

Amount

Patient Service Revenue

60.0

Accounts Receivable

15.0

Cash Payments

35.0

Accounts Payable

10.0

Medical Supplies Purchases

20.0

Estimated Bad Debts

5.0

Requirements:

  • Prepare XYZ Health Clinic's income statement for 2023 using the modified cash basis.
  • Calculate net income considering the conservatism principle.
  • Discuss the impact of estimated bad debts on financial statements.
  • Analyze the treatment of accounts receivable and medical supplies purchases under the conservatism principle.

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