• Johnson & Johnson faced significant litigation expenses totaling $3 billion during the year. The company reported the following financial data:
  • Litigation Expenses: $3 billion
  • Total Revenue: $80 billion
  • Cost of Goods Sold: $30 billion
  • Net Income: $10 billion

• Requirements:
  1. Calculate Johnson & Johnson's net income after accounting for the litigation expenses.
  2. Prepare an income statement showing the impact of the litigation expenses on net income.
  3. Analyze the strategic implications of the litigation expenses on Johnson & Johnson's financial performance.
  4. Discuss the disclosure requirements for significant legal settlements in Johnson & Johnson's financial statements.
  5. Evaluate the company's liquidity position and ability to absorb unexpected expenses.