Use the Johnson and Johnson 2016 10-K to answer the following: The link to the 1

Question

Use the Johnson and Johnson 2016 10-K to answer the following: The link to the 10-K is below. Thanks.

https://jnj.brightspotcdn.com/88/3f/b666368546bcab9fd520594a6016/2017-0310-ar-bookmarked.pdf

1) What is the net balance (carrying value) of PP&E at 12/31/16 and 12/31/15?

2) What is the gross balance of Machinery & Equipment at 12/31/16 and 12/31/15?

3) What dollar amount was added to PP&E in 2016, 2015, and 2014?

4) What method does Johnson & Johnson use to depreciate PP&E?

5) What useful life does Johnson & Johnson use for buildings and building equipment?

6) Does the company review long-lived assets to assess recoverability? If so, what method do they use?

Explanation / Answer

Solution:-

1) What is the net balance (carrying value) of PP&E at 12/31/16 and 12/31/15:-

2) What is the gross balance of Machinery & Equipment at 12/31/16 and 12/31/15:-

3) What dollar amount was added to PP&E in 2016, 2015, and 2014:-

4) What method does Johnson & Johnson use to depreciate PP&E:-

Property, plant and equipment are stated at cost. The Company utilizes the straight-line method of depreciation over the estimated useful lives of the assets.

5) What useful life does Johnson & Johnson use for buildings and building equipment:-

6) Does the company review long-lived assets to assess recoverability? If so, what method do they use:-

The Company reviews long-lived assets to assess recoverability using undiscounted cash flows. When certain events or changes in operating or economic conditions occur, an impairment assessment may be performed on the recoverability of the carrying value of these assets. If the asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. If quoted market prices are not available, the Company will estimate fair value using a discounted value of estimated future cash flows.

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