So, $3,950, okay?
And then my last transaction,
it is N for Nancy, I guess.
Or Nathan.
Is that on the 31st, we issue credit memo
for $595 merchandise return
from March 30th transaction,
the previous day.
The cost of that merchandise was $390.
So, we did a transaction similar to that,
where we had a return.
So, we have an account.
It's going to be called
Sales Return and Allowances.
So, we're going to debit
because the normal side
for sales return allowances
and sales discount--
contra revenue account--
is going to be on the debit side
because revenue--the normal side--
is going to be on the credit side.
And then, we want to make sure we credit
the accounts receivable
for this customer.
And the credit memo issue was for $595.
This $595
cost us $390.
So, we want to make sure we do like almost a reverse entry
where we first debit
the merchandise inventory.
And then, we
credit cost of goods sold.
And it was for $390, okay?
So, now I want to go to my subsidiary
ledger account for my customer,
making sure that I put in
that credit of $595.
So, this is transaction N.
And this is for credit memo number 2
for $595 that we're giving back
to the customer.
And so, this customer no longer owes us
$3,950.
By crediting it--
This is, again, a subsidiary accounts receivable
is still an accounts receivable account;
the normal side's on the debit side.
By crediting it,
we're reducing the balance that the customer owed to us.
This will complete all our journal entries.
You can check it against your solution.
Um, if you went through the whole process
of doing a general ledger,
you can also check against the general ledger solution for each account.
Um, but my subsidiary account
is now put together.
You can check it against the solution,
but what you want to put together is,
um, the accounts receivable schedule, okay?
So, basically, we want to know
what is the makeup of my accounts receivable?
So, what you want to do is,
you would look at the balance for each of your customer.
Uh, Durant, Durant, Durant.
The balance is $250.
And then, for Ron Lenham,
it is...
$3355.
And then, also for--
oops, excuse me--
Penny, the balance is--
Penny, Penny, Penny,
the balance is $800.
And then, for Jim Zamara.
Zamara, sorry.
Um, I'm awful, awful, awful with names.
The balance is $750,
which add up to be $5155.
So, your balance for accounts receivable--
So, here let's just show you really quickly.
If you have done all of your
general ledger correctly,
you will see that,
um, again, that beginning balance
is given to you under Data.
So, under Data, that $5000,
um, accounts receivable balance
was make up a sum of between
all of your customer:
$250, plus $550, plus $800, plus $550
would equals to $2150.
If you have kept track
of all your transactions
for accounts receivable, the total is $5155.
The purpose of a schedule
of accounts receivable--
Um, oops.
The purpose of a schedule of accounts receivable
is to know that what is that make up
of $5,155?
How much each customer owe you?
And even more sophisticated report
will be called a Schedule of Accounts Receivable.
Would also--
you'll learn in a 200-level financial accounting class--
where it will show, um,
not only how much each customer owe you
but how much they owe you within 0 to 30 days,
31 to 60 days,
and then 61 to 90 days,
or 90 days beyond.
Usually, the longer they owe you the money,
the less likely they will pay you back.
And this would be something that you will learn
when you learn about bad debt expense
in Financial 200 financial accounting class.
In this class, in your Introduction to Accounting class,
you always assume your customer
will pay you on-- you know, on time--
and you will always pay your vendors on time.
But in financial accounting, a second--
um, 200 level, you will learn
what happens when they don't pay you.
Okay, this is a much longer video than I intended.
Sorry, there was a lot of back and forth,
and then I also wanted to give you
some additional information.
Um, the key again of this particular
video for this chapter
is you need to know how to record journal entry
for perpetual inventory system
under the gross method.
You need to know how to figure out
and put together your
schedule of accounts receivable.
Okay.
Well, um, thank you for watching the video,
and I hope that this is helpful in your learning.
Please email me if you have any questions
and I will see you guys later.
Thank you. Bye.