Question

JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 29 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8) Net earnings 2018 81.581 27.091 54,490 22,540 10,775 1,126 (611) 1,005 1,405 251 17,999 2,702 15.297 2017 76,450 25,439 51,011 21,520 10,594 408 (385) 934 (42) 309 17,673 16,373 1,300 (368) 726 210 491 19,803 3,263 16,540 Net earnings per share (Notes 1 and 15) Basic Diluted 5.70 5.61 0.48 0.47 6.04 5.93 Average shares outstanding (Notes 1 and 15) Basic Diluted *Prior years amounts were reclassified to conform to current year presentation (adoption of ASU 2017-07) 2,681.5 2,728.7 2,692.0 2,745. 3 2 2,737.3 ,788.9 See Notes to Consolidated Financial Statements

Answer 1

Question 11

Let us begin by calculating the Current ratio for both the years

For 2018 = 46,033 / 31,230 = 1.47 : 1
For 2017 = 43,088 / 30,537 = 1.41 : 1

The ratio has improved marginally

Question 12

The following entry is recorded when a sale is made on account

Debit Accounts Receivable
Credit Revenue

So this means ACCOUNTS RECEIVABLE is increased
When you make a sale on account, the party (the DEBTOR) is obligated to pay. So it increases the receivable balance.

Question 13

Entry would be
Cash Debit
Accounts Receivable Credit

a	Retained earning increase	See the entry. No account that affects retained earnings is involved
b	accounts payable decreases	See the entry. No account that affects payable is involved
c	total assets increase	Cash is increasing the total assets whereas accounts receivable is decreasing the total assets. So in total there is no impact
d	Net Income does not change	This is the correct answer

Question 14

The correct answer is Option D

An income statement is never as on a particular date. It shows results for a particular period. In this case this period was fiscal period ended on December 30, 2018.

Question 15

The correct answer is Option B. $ 81,581 million. This is the sales to customers figure in the Consolidated Statement of Earnings