You are required to prepare a brief PowerPoint presentation for the SEC-10K Report. The presentation should be more than 10 sli

12

Johnson and Johnson Incorporation

Name: Seun Ubani Brady

Instructor: Carla Kroeze

Course: Principles of accounting ACCT 220

Date: 03/20/2022

Johnson and Johnson Incorporation

Introduction

Johnson and Johnson company is a global leader company in healthcare field. The company is involved in the carrying out research, manufacturing and selling of healthcare products. Johnson and Johnson company was formed in 1887 in the current state of New Jersey where it still has its current headquarters. Since its formation in 1887, Johnson and Johnson company has expanded and currently carries out its business in almost all countries across the globe. Johnson and Johnson company has three business segments which includes pharmaceutical, consumer health and medical devices. Consumer health business segment of Johnson and Johnson company is focused mainly personal healthcare products. The company business segment produces products which enhances personal skin health and beauty. Pharmaceutical business segment of Johnson and Johnson company has immunology, infectious disease, neuroscience, Oncology, cardiovascular and Metabolism and pulmonary hypertension as the main therapeutic areas which the company focuses. Johnson and Johnson company is also involved in the manufacture of medical devices which provides interventional solutions to patients.

Despite Johnson and Johnson company being present in all countries across the world, the company has only physical office in the United States. It operates in other countries virtually in all company’s segments to avoid the negative impact of different political system. The company mainly carries its business with healthcare professionals, hospitals, wholesalers, medical distributors and medical retail shops. Jonson and Johnson company is very competitive in all its business segment both locally in the United States and at global level. Some of the key competitors of Johnson and Johnson company includes the Pfizer, Unilever, Procter and Gamble, Merck among many other companies with produces similar products as those of Johnson and Johnson company. Johnson and Johnson company ensures that company remains competitive through investing much in research and development. Through research and development, Johnson and Johnson company has been able to improve its products to ensure they remain highly demanded in the market. Joaquin Duato is the current chief executive officer of Johnson and Johnson company and has been serving in the position since his appointment in January 2022. Johnson and Johnson company has market capitalization of $464.85 billion which makes the company one of the most valuable companies in terms of market capitalization.

Account Receivable

According to the consolidated balance sheet statement of Johnson and Johnson company, Account receivable of the company was valued at $15.283 billion. This was an improvement from company’s account receivable of $13.576 billion in 2020. This value of account receivable represents the net amount which the company expects to receive from customers. Johnson and Johnson company deals with customers across the world including retailers, hospitals, wholesale, and medical distributors across t the world. Since customers are from different locations, Johnson and Johnson company is exposed to credit risks. Some of the customers that Johnson and Johnson Company deals with are likely to default paying for inventory supplied to them by Johnson and Johnson company on credit.

Allowance for doubtful accounts is important for Johnson and Johnson company to ensure that customer defaulting in making payment for the inventory supplied to them is accounted for. Failure by Customer to make payment for supplied inventory is a loss to Johnson and Johnson company. According Johnson and Johnson company allowance for doubtful debt has decreased to $230 million in 2021 from $293 million which was recorded in 2020.

Inventories

Johnson and Johnson company inventories value is stated at the lower of cost or net realizable value. First in first out inventory valuation method is the method which is used by Johnson and Johnson company. Johnson and Johnson company value of inventory increased from $9.132 billion in 2020 to $10.387 billion in 2021 which represents an increase by $1.248 billion.

Johnson and Johnson company inventory comprises of raw materials and supplies, goods in process and finished goods. At the end of fiscal year 2021, Johnson and Johnson company inventory comprised of mainly finished goods which was valued at $6.508 billion. Goods in process was valued at $2.287 billion while raw materials and supplies of the company was valued at $1.592 billion

Property plant and Equipment

Property, Plant and Equipment is one of the key assets which is owned by Johnson and Johnson company. According to the balance sheet, net book value of Property, Plant and Equipment was valued at $18.692 billion which was an improvement from 2020 value of $18.766 billion. The value of the PPE is stated at cost in balance sheet and it is usually depreciated using the straight-line method. Some of the key PPE which are owned by Johnson and Johnson company includes building and equipment with an estimated useful life of between 20 and 30 years, land and leasehold improvement which is estimated to have life of between 10 and 20 years and machinery and equipment which is estimated to have life of between 2 and 13 years. The accumulated depreciation on property, plant and equipment owned by Johnson and Johnson company is estimated to be $28.717 billion.

Auditor’s Report

Johnson and Johnson company is audited by PricewaterhouseCooper LLP. According to the Auditor, Johnson and Johnson company financial statement represents the true and fair value of the company. PWC company provided a qualified opinion on financial performance of the company. Some of the critical audit matter Affecting Johnson and Johnson company includes U.S pharmaceutical Rebate Reserves, litigation contingencies-Talc and litigation -opioids.

Johnson and Johnson company financial statement

The financial statement of the Johnson and Johnson company includes Balance sheet, statement of earnings, statement of cash flows and Statement of changes in Equity. The financial statements are prepared to represent the fair value of both assets and liabilities of the company. Financial statement of Johnson and Johnson company have been attached below.

Conclusion

According to Sec 10K report, Johnson and Johnson company is a profitable company. The company generates major income from the sales to customers. Net earning of Johnson and Johnson company in 2021 was 20.878 billion.

References

https://johnsonandjohnson.gcsweb.com/node/49821/html#i01be8f8f216a4c39adb513a606bfe937_118

JOHNSON & JOHNSON AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

At January 2, 2022 and January 3, 2021

(Dollars in Millions Except Share and Per Share Amounts) (Note 1)

JOHNSON & JOHNSON AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars and Shares in Millions Except Per Share Amounts) (Note 1)

JOHNSON & JOHNSON AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Millions) (Note 1)

JOHNSON & JOHNSON AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in Millions) (Note 1)