0:00:00.040,0:00:01.479
and then we're going to credit.

0:00:01.480,0:00:05.919
We want to make sure we credit the full balance

0:00:05.920,0:00:13.719
of the accounts receivable[br]for the customer, okay?

0:00:13.720,0:00:18.559
So, we know that we're crediting $700.[br]Okay, we know that.

0:00:18.560,0:00:22.479
And we're also going to figure out what my discount is,

0:00:22.480,0:00:28.319
and that's $700 times 4%.

0:00:28.320,0:00:30.919
So, that's $28 in discount.

0:00:30.920,0:00:33.599
And so, the cash we're actually going[br]to receive from the customer

0:00:33.600,0:00:39.719
is going to be 700 minus 28, which is 672.

0:00:39.720,0:00:44.079
So, I want to go to my subsidiary ledger

0:00:44.080,0:00:47.759
and I want to reflect that we have a payment.

0:00:47.760,0:00:53.719
So, payment for ticket number 51,

0:00:53.720,0:00:56.919
uh, with discount, okay?

0:00:56.920,0:01:06.009
And this is going to be general ledger... E, I think.

0:01:06.010,0:01:09.369
And that is going to be a credit because the customer pay you.

0:01:09.370,0:01:12.489
They no longer owe you $1050.

0:01:12.490,0:01:16.049
So, they are paying, um...

0:01:16.050,0:01:20.449
How much are they paying?

0:01:20.450,0:01:23.489
They are paying $700.

0:01:23.490,0:01:27.129
Now, if you're in class, you will be,[br]"Hey, Irene, you made a mistake."

0:01:27.130,0:01:32.409
The mistake I made is my payment went to the wrong customer.

0:01:32.410,0:01:34.609
My payment did not go to Ron;

0:01:34.610,0:01:38.169
it went to B. Durant.

0:01:38.170,0:01:41.889
So, when you do your problem, you have to be really careful

0:01:41.890,0:01:47.849
and make sure that you pay to the right customer, okay?

0:01:47.850,0:01:53.849
So, we make a payment and that payment was $700.

0:01:53.850,0:01:56.809
It's not $700 cash that you receive,

0:01:56.810,0:02:00.489
but because, remember, the customer pay within the discount period.

0:02:00.490,0:02:07.259
They pay on a 10, the transaction happened on the 3rd,[br]so that's within ten days.

0:02:07.260,0:02:11.019
You are-- you still want to make sure you credit[br]the full amount of accounts receivable.

0:02:11.020,0:02:14.019
Otherwise, when you run the report at the end of the month,

0:02:14.020,0:02:15.699
how much each customer owes you,

0:02:15.700,0:02:19.499
it will still show that the customer owes you that $28.

0:02:19.500,0:02:23.179
This is why you would want to debit cash and debit sales discount,

0:02:23.180,0:02:26.659
and then credit the full amount $700.

0:02:26.660,0:02:30.819
So, we have a credit of $700.

0:02:30.820,0:02:34.779
So that's $950-- sorry--

0:02:34.780,0:02:39.539
plus the debit side, minus the credit side.

0:02:39.540,0:02:42.259
And so, it's $250 that this customer owe you,

0:02:42.260,0:02:44.019
which is the beginning balance

0:02:44.020,0:02:48.179
from a previous month that we carry over.

0:02:48.180,0:02:51.499
All right, so that's E, what's F?

0:02:51.500,0:02:56.619
F: we sold $3,000 merchandise inventory to Penny Pry.

0:02:56.620,0:02:59.859
Sales price is-- our sales ticket is number 53;

0:02:59.860,0:03:02.699
term, again, is the same, 4/10; net, 30.

0:03:02.700,0:03:06.219
Cost of merchandise was $2,100.

0:03:06.220,0:03:14.029
So, we want to make sure we record a debit[br]to accounts receivable to Penny.

0:03:14.030,0:03:16.869
So, that's Penny.

0:03:16.870,0:03:21.269
And then, the sale was for $3,000.

0:03:21.270,0:03:25.789
We want to make sure we credit sales revenue.

0:03:25.790,0:03:29.109
And then, we want to make sure we debit cost of goods sold,

0:03:29.110,0:03:32.629
and then also credit merchandise inventory.

0:03:32.630,0:03:35.789
The cost of merchandise inventory is given to us,

0:03:35.790,0:03:42.149
and that is $2100.

0:03:42.150,0:03:45.349
So, again, you would make that journal entry on the same day.

0:03:45.350,0:03:49.149
We're going to go to the subsidiary ledger for Penny.

0:03:49.150,0:03:53.989
So, we're going to find Penny's account-- subsidiary ledger.

0:03:53.990,0:03:58.389
And Penny also have a beginning balance

0:03:58.390,0:04:01.949
that's given to us in the data[br]and sometimes it's kind of hidden.

0:04:01.950,0:04:03.869
Kind of have to make sure you read really carefully.

0:04:03.870,0:04:07.509
So, that's where I find the $800 beginning balance.

0:04:07.510,0:04:11.369
So, I'm going to put that beginning balance of $800 for penny.

0:04:11.370,0:04:15.049
Um, this transaction happened on the 20th.

0:04:15.050,0:04:17.689
It is, um, transaction F.

0:04:17.690,0:04:25.489
We are still in, um, page two of the General Journal,

0:04:25.490,0:04:31.969
so I'm going to make sure I put in page two of the General Journal.

0:04:31.970,0:04:36.289
And this is going to be transaction F.

0:04:36.290,0:04:42.169
And this was invoice ticket, um, 50.

0:04:42.170,0:04:48.769
What was the invoice ticket?[br]Um, 53, if I remember correctly.

0:04:48.770,0:04:53.249
And this was a debit of $3,000.

0:04:53.250,0:04:56.369
So, now...

0:04:56.370,0:05:05.329
let's extend penny Pry owe our business

0:05:05.330,0:05:11.449
So-- and then on the 22nd, what happened on the 22nd?

0:05:11.450,0:05:14.739
We receive a cash payment from Ron

0:05:14.740,0:05:18.699
for March 4th transaction ticket number 51.

0:05:18.700,0:05:19.779
Okay.

0:05:19.780,0:05:24.779
So, we want to make sure we go back and look at ticket 51.

0:05:24.780,0:05:28.299
Ticket 51 happened on the 4th

0:05:28.300,0:05:35.459
and Ron is making a payment on the 22nd,

0:05:35.460,0:05:38.179
so more than ten days has passed.

0:05:38.180,0:05:41.459
The customer will have to pay the full valu-- full balance.

0:05:41.460,0:05:43.419
They don't get to enjoy the sales discount

0:05:43.420,0:05:45.219
because it's been more than ten days.

0:05:45.220,0:05:48.659
And that sales revenue was $50,

0:05:48.660,0:05:53.699
so we want to make sure we record that as cash payment.

0:05:53.700,0:05:58.499
So, we got that cash payment; we debit cash.

0:05:58.500,0:06:03.019
And then, we credit the accounts receivable for Ron,

0:06:03.020,0:06:06.059
which Irene is kind of lazy to type everything,

0:06:06.060,0:06:11.139
so the magic of Excel will allow me to...

0:06:11.140,0:06:12.139
copy and paste!

0:06:12.140,0:06:14.940
And that is $500 that we receive.