Jasper Sports Limited purchased inventory costing S10 000 by s gning a 10% short

Question

Jasper Sports Limited purchased inventory costing S10 000 by s gning a 10% short-term note payable. The purchase occurred on March 31, 2017. Jasper pays annual interest each year on March 31. 1. Show what the company would report on its balance sheet at December 31, 2017, and on its income statement for the year ended on that date 2. What one item will the financial statements for the year ended December 31, 2018, report? Identify the financial statement, the item, and its amount. 1.Show what the company would report on its balance sheet at December 31, 2017, and on its income statement for the year ended on that date. (Round your answers to the nearest whole dollar.) Start by showing what the company would report on its balance sheet Jasper Sports Limited Balance Sheet December 31, 2017 Liabilities Now, show what the company would report on its income statement. (Round your answers to the nearest whole dollar.) Jasper Sports Limited Income Statement For the Year Ended December 31, 2017 Expenses: 2. What one item will the financial statements for the year ended December 31, 2018, report? Identify the financial statement, the item, and its amount. The 2018 I will report

Explanation / Answer

1.

Amount reported by the company on its balance sheet and Income statement will be:

2.

2018 financial statement will report the Interest expense on the loan and the amount will be:

10,000*10%*12/12 = 1,000

Jasper Sports Limited Income Statement For the Year Ended December 31, 2017 Interest Expense (10,000*10%*9/12) 750

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