1
00:00:00,040 --> 00:00:01,479
and then we're going to credit.

2
00:00:01,480 --> 00:00:05,919
We want to make sure we credit the full balance

3
00:00:05,920 --> 00:00:13,719
of the accounts receivable
for the customer, okay?

4
00:00:13,720 --> 00:00:18,559
So, we know that we're crediting $700.
Okay, we know that.

5
00:00:18,560 --> 00:00:22,479
And we're also going to figure out what my discount is,

6
00:00:22,480 --> 00:00:28,319
and that's $700 times 4%.

7
00:00:28,320 --> 00:00:30,919
So, that's $28 in discount.

8
00:00:30,920 --> 00:00:33,599
And so, the cash we're actually going
to receive from the customer

9
00:00:33,600 --> 00:00:39,719
is going to be 700 minus 28, which is 672.

10
00:00:39,720 --> 00:00:44,079
So, I want to go to my subsidiary ledger

11
00:00:44,080 --> 00:00:47,759
and I want to reflect that we have a payment.

12
00:00:47,760 --> 00:00:53,719
So, payment for ticket number 51,

13
00:00:53,720 --> 00:00:56,919
uh, with discount, okay?

14
00:00:56,920 --> 00:01:06,009
And this is going to be general ledger... E, I think.

15
00:01:06,010 --> 00:01:09,369
And that is going to be a credit because the customer pay you.

16
00:01:09,370 --> 00:01:12,489
They no longer owe you $1050.

17
00:01:12,490 --> 00:01:16,049
So, they are paying, um...

18
00:01:16,050 --> 00:01:20,449
How much are they paying?

19
00:01:20,450 --> 00:01:23,489
They are paying $700.

20
00:01:23,490 --> 00:01:27,129
Now, if you're in class, you will be,
"Hey, Irene, you made a mistake."

21
00:01:27,130 --> 00:01:32,409
The mistake I made is my payment went to the wrong customer.

22
00:01:32,410 --> 00:01:34,609
My payment did not go to Ron;

23
00:01:34,610 --> 00:01:38,169
it went to B. Durant.

24
00:01:38,170 --> 00:01:41,889
So, when you do your problem, you have to be really careful

25
00:01:41,890 --> 00:01:47,849
and make sure that you pay to the right customer, okay?

26
00:01:47,850 --> 00:01:53,849
So, we make a payment and that payment was $700.

27
00:01:53,850 --> 00:01:56,809
It's not $700 cash that you receive,

28
00:01:56,810 --> 00:02:00,489
but because, remember, the customer pay within the discount period.

29
00:02:00,490 --> 00:02:07,259
They pay on a 10, the transaction happened on the 3rd,
so that's within ten days.

30
00:02:07,260 --> 00:02:11,019
You are-- you still want to make sure you credit
the full amount of accounts receivable.

31
00:02:11,020 --> 00:02:14,019
Otherwise, when you run the report at the end of the month,

32
00:02:14,020 --> 00:02:15,699
how much each customer owes you,

33
00:02:15,700 --> 00:02:19,499
it will still show that the customer owes you that $28.

34
00:02:19,500 --> 00:02:23,179
This is why you would want to debit cash and debit sales discount,

35
00:02:23,180 --> 00:02:26,659
and then credit the full amount $700.

36
00:02:26,660 --> 00:02:30,819
So, we have a credit of $700.

37
00:02:30,820 --> 00:02:34,779
So that's $950-- sorry--

38
00:02:34,780 --> 00:02:39,539
plus the debit side, minus the credit side.

39
00:02:39,540 --> 00:02:42,259
And so, it's $250 that this customer owe you,

40
00:02:42,260 --> 00:02:44,019
which is the beginning balance

41
00:02:44,020 --> 00:02:48,179
from a previous month that we carry over.

42
00:02:48,180 --> 00:02:51,499
All right, so that's E, what's F?

43
00:02:51,500 --> 00:02:56,619
F: we sold $3,000 merchandise inventory to Penny Pry.

44
00:02:56,620 --> 00:02:59,859
Sales price is-- our sales ticket is number 53;

45
00:02:59,860 --> 00:03:02,699
term, again, is the same, 4/10; net, 30.

46
00:03:02,700 --> 00:03:06,219
Cost of merchandise was $2,100.

47
00:03:06,220 --> 00:03:14,029
So, we want to make sure we record a debit
to accounts receivable to Penny.

48
00:03:14,030 --> 00:03:16,869
So, that's Penny.

49
00:03:16,870 --> 00:03:21,269
And then, the sale was for $3,000.

50
00:03:21,270 --> 00:03:25,789
We want to make sure we credit sales revenue.

51
00:03:25,790 --> 00:03:29,109
And then, we want to make sure we debit cost of goods sold,

52
00:03:29,110 --> 00:03:32,629
and then also credit merchandise inventory.

53
00:03:32,630 --> 00:03:35,789
The cost of merchandise inventory is given to us,

54
00:03:35,790 --> 00:03:42,149
and that is $2100.

55
00:03:42,150 --> 00:03:45,349
So, again, you would make that journal entry on the same day.

56
00:03:45,350 --> 00:03:49,149
We're going to go to the subsidiary ledger for Penny.

57
00:03:49,150 --> 00:03:53,989
So, we're going to find Penny's account-- subsidiary ledger.

58
00:03:53,990 --> 00:03:58,389
And Penny also have a beginning balance

59
00:03:58,390 --> 00:04:01,949
that's given to us in the data
and sometimes it's kind of hidden.

60
00:04:01,950 --> 00:04:03,869
Kind of have to make sure you read really carefully.

61
00:04:03,870 --> 00:04:07,509
So, that's where I find the $800 beginning balance.

62
00:04:07,510 --> 00:04:11,369
So, I'm going to put that beginning balance of $800 for penny.

63
00:04:11,370 --> 00:04:15,049
Um, this transaction happened on the 20th.

64
00:04:15,050 --> 00:04:17,689
It is, um, transaction F.

65
00:04:17,690 --> 00:04:25,489
We are still in, um, page two of the General Journal,

66
00:04:25,490 --> 00:04:31,969
so I'm going to make sure I put in page two of the General Journal.

67
00:04:31,970 --> 00:04:36,289
And this is going to be transaction F.

68
00:04:36,290 --> 00:04:42,169
And this was invoice ticket, um, 50.

69
00:04:42,170 --> 00:04:48,769
What was the invoice ticket?
Um, 53, if I remember correctly.

70
00:04:48,770 --> 00:04:53,249
And this was a debit of $3,000.

71
00:04:53,250 --> 00:04:56,369
So, now...

72
00:04:56,370 --> 00:05:05,329
let's extend penny Pry owe our business

73
00:05:05,330 --> 00:05:11,449
So-- and then on the 22nd, what happened on the 22nd?

74
00:05:11,450 --> 00:05:14,739
We receive a cash payment from Ron

75
00:05:14,740 --> 00:05:18,699
for March 4th transaction ticket number 51.

76
00:05:18,700 --> 00:05:19,779
Okay.

77
00:05:19,780 --> 00:05:24,779
So, we want to make sure we go back and look at ticket 51.

78
00:05:24,780 --> 00:05:28,299
Ticket 51 happened on the 4th

79
00:05:28,300 --> 00:05:35,459
and Ron is making a payment on the 22nd,

80
00:05:35,460 --> 00:05:38,179
so more than ten days has passed.

81
00:05:38,180 --> 00:05:41,459
The customer will have to pay the full valu-- full balance.

82
00:05:41,460 --> 00:05:43,419
They don't get to enjoy the sales discount

83
00:05:43,420 --> 00:05:45,219
because it's been more than ten days.

84
00:05:45,220 --> 00:05:48,659
And that sales revenue was $50,

85
00:05:48,660 --> 00:05:53,699
so we want to make sure we record that as cash payment.

86
00:05:53,700 --> 00:05:58,499
So, we got that cash payment; we debit cash.

87
00:05:58,500 --> 00:06:03,019
And then, we credit the accounts receivable for Ron,

88
00:06:03,020 --> 00:06:06,059
which Irene is kind of lazy to type everything,

89
00:06:06,060 --> 00:06:11,139
so the magic of Excel will allow me to...

90
00:06:11,140 --> 00:06:12,139
copy and paste!

91
00:06:12,140 --> 00:06:14,940
And that is $500 that we receive.