WEBVTT 00:00:00.040 --> 00:00:01.479 and then we're going to credit. 00:00:01.480 --> 00:00:05.919 We want to make sure we credit the full balance 00:00:05.920 --> 00:00:13.719 of the accounts receivable for the customer, okay? 00:00:13.720 --> 00:00:18.559 So, we know that we're crediting $700. Okay, we know that. 00:00:18.560 --> 00:00:22.479 And we're also going to figure out what my discount is, 00:00:22.480 --> 00:00:28.319 and that's $700 times 4%. 00:00:28.320 --> 00:00:30.919 So, that's $28 in discount. 00:00:30.920 --> 00:00:33.599 And so, the cash we're actually going to receive from the customer 00:00:33.600 --> 00:00:39.719 is going to be 700 minus 28, which is 672. 00:00:39.720 --> 00:00:44.079 So, I want to go to my subsidiary ledger 00:00:44.080 --> 00:00:47.759 and I want to reflect that we have a payment. 00:00:47.760 --> 00:00:53.719 So, payment for ticket number 51, 00:00:53.720 --> 00:00:56.919 uh, with discount, okay? 00:00:56.920 --> 00:01:06.009 And this is going to be general ledger... E, I think. 00:01:06.010 --> 00:01:09.369 And that is going to be a credit because the customer pay you. 00:01:09.370 --> 00:01:12.489 They no longer owe you $1050. 00:01:12.490 --> 00:01:16.049 So, they are paying, um... 00:01:16.050 --> 00:01:20.449 How much are they paying? 00:01:20.450 --> 00:01:23.489 They are paying $700. 00:01:23.490 --> 00:01:27.129 Now, if you're in class, you will be, "Hey, Irene, you made a mistake." 00:01:27.130 --> 00:01:32.409 The mistake I made is my payment went to the wrong customer. 00:01:32.410 --> 00:01:34.609 My payment did not go to Ron; 00:01:34.610 --> 00:01:38.169 it went to B. Durant. 00:01:38.170 --> 00:01:41.889 So, when you do your problem, you have to be really careful 00:01:41.890 --> 00:01:47.849 and make sure that you pay to the right customer, okay? 00:01:47.850 --> 00:01:53.849 So, we make a payment and that payment was $700. 00:01:53.850 --> 00:01:56.809 It's not $700 cash that you receive, 00:01:56.810 --> 00:02:00.489 but because, remember, the customer pay within the discount period. 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. 00:02:07.260 --> 00:02:11.019 You are-- you still want to make sure you credit the full amount of accounts receivable. 00:02:11.020 --> 00:02:14.019 Otherwise, when you run the report at the end of the month, 00:02:14.020 --> 00:02:15.699 how much each customer owes you, 00:02:15.700 --> 00:02:19.499 it will still show that the customer owes you that $28. 00:02:19.500 --> 00:02:23.179 This is why you would want to debit cash and debit sales discount, 00:02:23.180 --> 00:02:26.659 and then credit the full amount $700. 00:02:26.660 --> 00:02:30.819 So, we have a credit of $700. 00:02:30.820 --> 00:02:34.779 So that's $950-- sorry-- 00:02:34.780 --> 00:02:39.539 plus the debit side, minus the credit side. 00:02:39.540 --> 00:02:42.259 And so, it's $250 that this customer owe you, 00:02:42.260 --> 00:02:44.019 which is the beginning balance 00:02:44.020 --> 00:02:48.179 from a previous month that we carry over. 00:02:48.180 --> 00:02:51.499 All right, so that's E, what's F? 00:02:51.500 --> 00:02:56.619 F: we sold $3,000 merchandise inventory to Penny Pry. 00:02:56.620 --> 00:02:59.859 Sales price is-- our sales ticket is number 53; 00:02:59.860 --> 00:03:02.699 term, again, is the same, 4/10; net, 30. 00:03:02.700 --> 00:03:06.219 Cost of merchandise was $2,100. 00:03:06.220 --> 00:03:14.029 So, we want to make sure we record a debit to accounts receivable to Penny. 00:03:14.030 --> 00:03:16.869 So, that's Penny. 00:03:16.870 --> 00:03:21.269 And then, the sale was for $3,000. 00:03:21.270 --> 00:03:25.789 We want to make sure we credit sales revenue. 00:03:25.790 --> 00:03:29.109 And then, we want to make sure we debit cost of goods sold, 00:03:29.110 --> 00:03:32.629 and then also credit merchandise inventory. 00:03:32.630 --> 00:03:35.789 The cost of merchandise inventory is given to us, 00:03:35.790 --> 00:03:42.149 and that is $2100. 00:03:42.150 --> 00:03:45.349 So, again, you would make that journal entry on the same day. 00:03:45.350 --> 00:03:49.149 We're going to go to the subsidiary ledger for Penny. 00:03:49.150 --> 00:03:53.989 So, we're going to find Penny's account-- subsidiary ledger. 00:03:53.990 --> 00:03:58.389 And Penny also have a beginning balance 00:03:58.390 --> 00:04:01.949 that's given to us in the data and sometimes it's kind of hidden. 00:04:01.950 --> 00:04:03.869 Kind of have to make sure you read really carefully. 00:04:03.870 --> 00:04:07.509 So, that's where I find the $800 beginning balance. 00:04:07.510 --> 00:04:11.369 So, I'm going to put that beginning balance of $800 for penny. 00:04:11.370 --> 00:04:15.049 Um, this transaction happened on the 20th. 00:04:15.050 --> 00:04:17.689 It is, um, transaction F. 00:04:17.690 --> 00:04:25.489 We are still in, um, page two of the General Journal, 00:04:25.490 --> 00:04:31.969 so I'm going to make sure I put in page two of the General Journal. 00:04:31.970 --> 00:04:36.289 And this is going to be transaction F. 00:04:36.290 --> 00:04:42.169 And this was invoice ticket, um, 50. 00:04:42.170 --> 00:04:48.769 What was the invoice ticket? Um, 53, if I remember correctly. 00:04:48.770 --> 00:04:53.249 And this was a debit of $3,000. 00:04:53.250 --> 00:04:56.369 So, now... 00:04:56.370 --> 00:05:05.329 let's extend penny Pry owe our business 00:05:05.330 --> 00:05:11.449 So-- and then on the 22nd, what happened on the 22nd? 00:05:11.450 --> 00:05:14.739 We receive a cash payment from Ron 00:05:14.740 --> 00:05:18.699 for March 4th transaction ticket number 51. 00:05:18.700 --> 00:05:19.779 Okay. 00:05:19.780 --> 00:05:24.779 So, we want to make sure we go back and look at ticket 51. 00:05:24.780 --> 00:05:28.299 Ticket 51 happened on the 4th 00:05:28.300 --> 00:05:35.459 and Ron is making a payment on the 22nd, 00:05:35.460 --> 00:05:38.179 so more than ten days has passed. 00:05:38.180 --> 00:05:41.459 The customer will have to pay the full valu-- full balance. 00:05:41.460 --> 00:05:43.419 They don't get to enjoy the sales discount 00:05:43.420 --> 00:05:45.219 because it's been more than ten days. 00:05:45.220 --> 00:05:48.659 And that sales revenue was $50, 00:05:48.660 --> 00:05:53.699 so we want to make sure we record that as cash payment. 00:05:53.700 --> 00:05:58.499 So, we got that cash payment; we debit cash. 00:05:58.500 --> 00:06:03.019 And then, we credit the accounts receivable for Ron, 00:06:03.020 --> 00:06:06.059 which Irene is kind of lazy to type everything, 00:06:06.060 --> 00:06:11.139 so the magic of Excel will allow me to... 00:06:11.140 --> 00:06:12.139 copy and paste! 00:06:12.140 --> 00:06:14.940 And that is $500 that we receive.