1
00:00:00,840 --> 00:00:04,600
So, $3,950, okay?

2
00:00:04,600 --> 00:00:07,920
And then my last transaction,

3
00:00:07,920 --> 00:00:11,080
it is N for Nancy, I guess.

4
00:00:11,080 --> 00:00:12,680
Or Nathan.

5
00:00:12,680 --> 00:00:17,160
Is that on the 31st,
we issue credit memo

6
00:00:17,160 --> 00:00:21,840
for $595 merchandise return
from March 30th transaction,

7
00:00:21,840 --> 00:00:23,200
the previous day.

8
00:00:23,200 --> 00:00:26,280
The cost of that merchandise was $390.

9
00:00:26,280 --> 00:00:28,680
So, we did a transaction similar to that,

10
00:00:28,680 --> 00:00:30,120
where we had a return.

11
00:00:30,120 --> 00:00:31,600
So, we have an account.

12
00:00:31,600 --> 00:00:35,960
It's going to be called
Sales Return and Allowances.

13
00:00:35,960 --> 00:00:38,440
So, we're going to debit
because the normal side

14
00:00:38,440 --> 00:00:41,920
for sales return allowances
and sales discount,

15
00:00:41,920 --> 00:00:43,120
contra revenue account,

16
00:00:43,120 --> 00:00:45,000
is going to be on the debit side

17
00:00:45,000 --> 00:00:46,400
because revenue,
the normal side,

18
00:00:46,400 --> 00:00:48,120
is going to be on the credit side.

19
00:00:48,120 --> 00:00:52,480
And then, we want to make sure we credit
the accounts receivable

20
00:00:52,480 --> 00:00:55,080
for this customer.

21
00:00:55,080 --> 00:01:01,960
And the credit memo issue was for $595.

22
00:01:01,960 --> 00:01:04,932
This $595

23
00:01:04,932 --> 00:01:10,111
cost us $390.

24
00:01:13,820 --> 00:01:17,980
So, we want to make sure we do
like almost a reverse entry

25
00:01:17,980 --> 00:01:23,940
where we first debit
the merchandise inventory.

26
00:01:23,940 --> 00:01:25,960
And then, we...

27
00:01:25,960 --> 00:01:30,790
credit cost of goods sold.

28
00:01:30,790 --> 00:01:35,860
And it was for $390, okay?

29
00:01:35,860 --> 00:01:40,900
So, now I want to go to my subsidiary
ledger account for my customer,

30
00:01:40,900 --> 00:01:45,260
making sure that I put in
that credit of $595.

31
00:01:45,260 --> 00:01:50,053
So, this is transaction N.

32
00:01:51,900 --> 00:01:56,410
And this is for credit memo number 2

33
00:01:56,410 --> 00:02:02,740
for $595 that we're giving back
to the customer.

34
00:02:02,740 --> 00:02:08,230
And so, this customer no longer owes us
$3,950.

35
00:02:08,230 --> 00:02:10,350
By crediting it--

36
00:02:10,350 --> 00:02:13,190
This is, again,
a subsidiary accounts receivable

37
00:02:13,190 --> 00:02:15,030
is still an accounts receivable account;

38
00:02:15,030 --> 00:02:17,870
the normal side's on the debit side.

39
00:02:17,870 --> 00:02:18,910
By crediting it,

40
00:02:18,910 --> 00:02:22,550
we're reducing the balance
that the customer owed to us.

41
00:02:22,550 --> 00:02:25,310
This will complete
all our journal entries.

42
00:02:25,310 --> 00:02:27,590
You can check it against your solution.

43
00:02:27,590 --> 00:02:30,800
Um, if you went through the whole process
of doing a general ledger,

44
00:02:30,800 --> 00:02:33,362
you can also check against
the general ledger solution

45
00:02:33,362 --> 00:02:35,430
for each account.

46
00:02:35,430 --> 00:02:38,670
Um, but my subsidiary account
is now put together.

47
00:02:38,710 --> 00:02:41,070
You can check it against the solution,

48
00:02:41,070 --> 00:02:44,430
but what you want to put together is

49
00:02:44,430 --> 00:02:47,750
the accounts receivable schedule,
okay?

50
00:02:47,750 --> 00:02:50,030
So, basically,
we want to know

51
00:02:50,030 --> 00:02:53,270
what is the makeup
of my accounts receivable?

52
00:02:53,270 --> 00:02:55,190
So, what you want to do is,

53
00:02:55,190 --> 00:02:58,750
you would look at the balance
for each of your customer.

54
00:02:58,750 --> 00:03:01,150
Uh, Durant, Durant, Durant.

55
00:03:01,150 --> 00:03:04,730
The balance is $250.

56
00:03:04,730 --> 00:03:08,710
And then, for Ron Lenham,

57
00:03:08,710 --> 00:03:13,050
it is...

58
00:03:13,050 --> 00:03:14,610
$3355.

59
00:03:14,610 --> 00:03:20,470
And then, also for--
oops, excuse me--

60
00:03:20,470 --> 00:03:25,750
Penny, the balance is--

61
00:03:25,750 --> 00:03:27,250
Penny, Penny, Penny,

62
00:03:27,250 --> 00:03:31,410
the balance is $800.

63
00:03:31,410 --> 00:03:35,430
And then, for Jim Zamara.

64
00:03:35,430 --> 00:03:37,530
Zamara, sorry.

65
00:03:37,530 --> 00:03:40,890
Um, I'm awful, awful, awful with names.

66
00:03:40,890 --> 00:03:42,850
The balance is $750,

67
00:03:42,850 --> 00:03:45,690
which add up to be $5155.

68
00:03:45,690 --> 00:03:47,770
So, your balance
for accounts receivable--

69
00:03:47,770 --> 00:03:49,970
So, here let's just show you
really quickly.

70
00:03:49,970 --> 00:03:54,650
If you have done all of your
general ledger correctly,

71
00:03:54,650 --> 00:03:56,050
you will see that,

72
00:03:56,050 --> 00:04:00,450
um, again, that beginning balance
is given to you under Data.

73
00:04:00,450 --> 00:04:04,610
So, under Data, that $5000,

74
00:04:04,610 --> 00:04:07,990
um, accounts receivable balance

75
00:04:07,990 --> 00:04:11,230
was make up a sum of between
all of your customer:

76
00:04:11,230 --> 00:04:14,950
$250, plus $550,
plus $800, plus $550

77
00:04:14,950 --> 00:04:17,270
would equals to $2150.

78
00:04:17,270 --> 00:04:19,830
If you have kept track
of all your transactions

79
00:04:19,830 --> 00:04:24,430
for accounts receivable,
the total is $5155.

80
00:04:24,430 --> 00:04:28,550
The purpose of a schedule
of accounts receivable--

81
00:04:28,550 --> 00:04:30,270
Um, oops.

82
00:04:30,270 --> 00:04:33,270
The purpose of a schedule
of accounts receivable

83
00:04:33,270 --> 00:04:37,470
is to know that what is that make up
of $5,155?

84
00:04:37,470 --> 00:04:40,190
How much each customer owe you?

85
00:04:40,190 --> 00:04:44,070
And even more sophisticated report

86
00:04:44,070 --> 00:04:47,310
will be called
a Schedule of Accounts Receivable,

87
00:04:47,310 --> 00:04:48,870
would also--

88
00:04:48,870 --> 00:04:52,150
You'll learn in a 200-level
financial accounting class;

89
00:04:52,150 --> 00:04:56,870
--where it will show, um,
not only how much each customer owe you

90
00:04:56,870 --> 00:05:00,460
but how much they owe you
within 0 to 30 days,

91
00:05:00,460 --> 00:05:02,030
31 to 60 days,

92
00:05:02,030 --> 00:05:03,910
and then 61 to 90 days,

93
00:05:03,910 --> 00:05:06,230
or 90 days beyond.

94
00:05:06,230 --> 00:05:09,320
Usually,
the longer they owe you the money,

95
00:05:09,320 --> 00:05:11,840
the less likely they will pay you back.

96
00:05:11,840 --> 00:05:14,000
And this would be
something that you will learn

97
00:05:14,000 --> 00:05:17,360
when you learn about
bad debt expense

98
00:05:17,360 --> 00:05:19,840
in Financial 200 financial accounting class.

99
00:05:19,840 --> 00:05:22,560
In this class, in your Introduction
to Accounting class,

100
00:05:22,560 --> 00:05:25,440
you always assume your customer
will pay you on-- you know, on time--

101
00:05:25,440 --> 00:05:27,960
and you will always pay your vendors
on time.

102
00:05:27,960 --> 00:05:30,240
But in financial accounting, a second--

103
00:05:30,240 --> 00:05:34,080
um, 200 level, you will learn
what happens when they don't pay you.

104
00:05:34,080 --> 00:05:36,680
Okay, this is a much longer video
than I intended.

105
00:05:36,680 --> 00:05:38,680
Sorry, there was a lot of back and forth,

106
00:05:38,680 --> 00:05:42,960
and then I also wanted to give you
some additional information.

107
00:05:42,960 --> 00:05:46,840
Um, the key again of this particular
video for this chapter

108
00:05:46,840 --> 00:05:49,960
is you need to know
how to record journal entry

109
00:05:49,960 --> 00:05:52,880
for perpetual inventory system
under the gross method.

110
00:05:52,880 --> 00:05:55,200
You need to know how to figure out

111
00:05:55,200 --> 00:05:58,840
and put together your
schedule of accounts receivable.

112
00:05:58,840 --> 00:06:01,320
Okay, well,
thank you for watching the video,

113
00:06:01,320 --> 00:06:04,080
and I hope that this is helpful
in your learning.

114
00:06:04,080 --> 00:06:06,080
Please email me if you have any questions,

115
00:06:06,080 --> 00:06:09,710
and I will see you guys later.
Thank you! Bye.