Hi here we are once more. Last lecture what we did is we spoke about
And then they offer them to customer ' s? Makers and also they do a lot of selling to consumer'' s? Once we go over that homework issue we'' re.
ok so allow'' s do I think I simply designated exercise five one is that right? Ok so let'' s look at our research workout.
five one hope you individuals in the house are doing your research I believe these media classes.
or online courses I believe are really efficient as lengthy as you'' re disciplined and doing your.
April the 2nd acquisition product from.
blue company under the complying with terms thirty 6 hundred dollar rate invoice dated April.
2 credit score regards to two fifteen internet sixty and also totally free onboard shipping factor. Ok we discussed shipping last time didn'' t. we free onboard shipping factor who is going to ultimately pay for this the customer or the.
vendor? Free onboard shipping factor the customer that.
means it'' s only as maximize to the point where they begin delivering it so the buyer is going. to end up spending for it.Ok alright the very first journal entry on April.
the second is as comply with. Ok that'' s regarding like I ' ll get
ok we. debit goods inventory and we credit scores accounts payable currently what they is they have.
accounts payable hyphened blue that'' s not truly a completely brand-new account like on the equilibrium.
sheet or something they'' re simply keeping track of which accounts payable firm it is sometimes.
individuals placed it in parenthesis ok it'' s sort of much easier when you ' re doing this kind of point.
mosting likely to be taking care of two suppliers. Ok so we debit product inventory as well as we.
debt accounts payable blue alright. Alright allows ay we paid two hundred April.
third we paid two hundred dollars for shipping fees on the April two purchase ok. What do we debit right here what do we debit? Product inventory now you might be tempted.
to debit transport expenditure or delivery expenditure however as we discussed I understand we king.
of rushed with it at the end of last lecture with transportation charges we debit product.
Go back to the Elmo as well as I ' ll show you this. And also if it was to blue they would send out a separate.
this type of situation it is a separate company it is a different shipment business and also if it'' s. not in the first purchase on April second it would claim thirty six hundred bucks plus.
such and also such for delivery expense or consisting of or whatever.Ok “the separate firm doing why wouldn ' t. you place that separate company you recognize like Fed Ex lover in cash due to the fact that you ' re paying” you. imply as much as accounts payable? “No like on the 3rd if you ' re paying delivery. price and afterwards cash I credited cash money?” again why aren ' t we debiting shipping cost. or something like that?” Allow me offer you an instance that I assume kind.
Let ' s state that the seller that were dealing. I assume I ' d imagine it obtains quite lonely. Anyways allow ' s state we have a company that.
Alright let ' s claim we are buying from a various. supplier vendor B and the reason we ' re taking into consideration supplier B is because the price is only fourteen.
Well do you see where the correct means to account. B is going to be a better scenario as well as offer you a greater gross profit bear in mind gross earnings. Is your sales cost minus your price of items offered?
the good that will ultimately of the good that will certainly be single is really sixteen hundred.
does that make good sense, Marlin? Otherwise you might make some incorrect decisions.
regarding the prices that you bill your customer ' s the prices that you bill.
your consumer ' s.So one common thing that you ' ll hear in audit.
is that whatever price are required to get an item are caught in the property itself.
Us you at house can ' t see them, but they had to buy these huge lights? Let ' s claim they acquired these large lights. You with me and that ' s exactly how much we decrease.
I put cash initial” that ' s alright if there are both credited you can place cash money before.
Well here ' s the
issue they didn ' t understand how.
to do every little thing in the brand-new accountancy system so what they did and also this is the worst choice.
they might make. They kept they used their brand-new audit system. for the purchases that they understood how to make as well as they used their old one that. they sanctuary ' t figured out yet so they'essentially had two separate nonintegrated bookkeeping. systems where they were keeping track of stuff.
You with me? What my work was is to incorporate all of. that into one and sadly they have been doing this for a lengthy time. So I state all this because it ' s one of the. proudest points I ' ve ever done as an accounting professional it took 3 weeks to determine the journal. access as well as I won ' t enter into all the intricacies since you could think that ' s not that tough. Due to the fact that you wanted to preserve the integrity of being able to, of a deal it was really hard. reconcile your cash money and also all that as well as stuff yet it took me 3 weeks as for digging. around to make this journal entry which one journal access had to do with'one hundred. as well as twenty lines of credit scores and debits and also yet we ultimately scheduled that journal access and. held our breath and it worked but that was a hundred and twenty lines of journal access.
can you think of that? As well as we ' ll be dealing with that kind of a journal.
This is kind of a in workout 5 one there ' s kind of two circumstances going on? Currently FOV destination means who is going to. For seventy 5 hundred dollars are you with.
me? Now what takes place on April the twenty.
after settlements we received from fox a twenty one hundred dollar allowance on the. April eighteenth purchase? Currently do you remember us discussing purchase. returns and also acquisition allowances purchase returns are when I physically return the excellent to the. seller as well as they reduce my accounts payable like if you take a coat back to JC dime.
If there is something wrong with it and so they are stating well if you, an allowance is.
want to keep you can as well as well rip off several of the price of what you owe us so we are.
Fifty 4 hundred right the seventy 5. “So you do the two percent you have the money. Yes it ' s an excellent point excellent factor Matt you.
Now what we are going to do If I had a different., yet one of the things that '
s very extremely vital this chapter phase that you are shifted changedRight into That ' s what we are going to speak regarding now.
What these new accounts are sales discounts.
and also sales return as well as allowance these are contra income accounts where ' s did my tip go?
Where ' s my guideline these are contra profits. What was the opposite asset account that we ' ve. We have 2 brand-new accounts below sales discount.
eighteenth ruby store sold twenty 5 thousand dollars of product on account.
The product was brought in supply at. a cost of eighteen thousand ok.
Now something you need to kind of a little. bit cognize of is I '
ve been prompting you to think of sellers like Walmart or bestbuy. and also JC Cent as well as those type of points right? When you buy things as customer from there. you never ever buy on account do you don ' t you always simply pay cash well those firms.
store do sell on accounts as well now it '
s easy if you simply sell on cash ok you just. don ' t debit receivables you simply debit cash money as the vendor, yet we ' re going to be. learning more about when you market on credit as a merchandiser.So looking back at this example right here ' s what. If on March eighteenth you sold twenty five thousand dollars, you require to do in this situation
Bucks of merchandise on account and it was brought at the cost of eighteen thousand you make. 2 journal entry you make two journal access. Now this is type of new reason you are used.
to one deal equals one journal entrance well here we have one deal equates to two.
journal entries and also I wear ' t desire you to integrate those into one journal entrance I want you to.
Perpetual
means indicates going on, and on, andAs well as In a perpetual supply system we are constantly.
When we make sales that when we do it right when we make the, adjusting our inventory. sale so when we market these goods we debit accounts receivable and also we credit sales for. twenty 5 thousand and after that we debit expense that were offered as well as we credit goods stock. for eighteen thousand. Are you with me? Now
there is likewise what we call a periodic. stock system a routine inventory system that ' s not what we are researching currently, however.
in a periodic stock system we would only make the journal up leading regular would certainly me. is that we just routine would certainly indicate is that we only occasionally update our supply. When I was a young child in college complete, like each month.Now.
of hopes as well as fantasizes we studied the regular system as well as after that
we researched the continuous and. we studied regarding equivalent time on those 2 methods.
Currently you individuals all we are really mosting likely to talk. about is the continuous inventory system were supply is continuously perpetually updated. why the adjustment in between the nineteen eighty 6 when I took this course versus two thousand. and also eleven when you ' re taking this class? Was I just smarter at that time than you men. are and so we can just instruct you one approach perhaps? No I am just kidding.
Why are we only instructing the continuous technique. now or why do we concentrate on it? “reason for computer systems” Yeah ok there ' s the word. Modern technology ok it ' s all computers these days? When you go buy a basket packed with products at. rate chopper as well as they ' re monitoring you
out they ' re scanning bench codes and also you get. some coco puffs as well as you acquire some butter and also you acquire some ketchup they ' re scanning those. points right well there ' s two points occurring when they scan that those coco smokes across. the little lasers its claiming just how much you require to spend for those coco puffs however it is. likewise changing their inventory coco puffs its decreasing it by a box
right? As well as its lowering butter by a tub as well as its. decreasing catsup by a bottle.That ' s all occurring in the technology taking place. right? As well as in fact it ' s not also that costly. of technology as you would certainly think these upc code. You with me? “Now return to a food store have you ever
been to a grocery store where they didn'' t do the scanner you guys are possibly too young,
yet when I was a kid they would certainly stand in front of the sales register and also it was like tap,
tap, tap, tap, tap you'' ve ever before seen that okay watch an old Andy griffin show or a Brady
bunch show or something like that as well as you would certainly see them doing that.Well can you imagine just how difficult it would be to keep track of your supply of coco smokes, butter tubs, as well as ketchup without technology? It'' s like we offered some coco puffs a box we sold a container of no you couldn'' t t do it you can not constantly keep an eye on it', and also that ' s why we found out those two approaches in nineteen eighty 6 and now everybody you can most likely to most likely the smallest town in Kansas and they possibly have bar codes as well as scanners put on'' t they? Once when coco, and also it ' s all set up so
that smokes degree comes down it automatically shoots an order to the maker of coco puffs that we need even more coco smokes you see what I'' m claiming? It ' s all computerized nowadays'so we ' re. not going to concentrate on the periodic inventory system we'' re going to focus on the continuous.
inventory system. Because individuals need to know exactly how much stock.
They wear ' t desire to simply know the end of the. We desire to recognize currently!
allows us to do so.So back to this journal entrance we debit AR.
for twenty 5 thousand and we credit rating sales for twenty five thousand and now we are going.
to deal on the reduced journal entrance on this we debit expense of goods marketed what is cost of.
products sold? For your useful purposes it'' s a debit equilibrium. account you can type of think of an expenditure. You may wish to add a flash card for that.
as well. Price of items offered is a debit balance account.
it'' s on the revenue declaration you can believe of it as a cost. And also we credit score or reduce merchandise supply.
Currently in a lot of instances what'' s going to be greater? The sales rate of the item or the product.
expense of the product? What'' s going to be higher? You'' re not mosting likely to stay in company very.
long if you don'' t charge the client even more cash than what you spent for it as a retailer.
deal with? Currently let me tell you where pupils mess this.
thing up.Well they recognize the journal entrance is accounts.
Receivable, sales, cost of items marketed, goods supply? Twenty 5 and also eighteen?
that there'' s these 4 accounts as well as they know the big number is on top and also the little.
number is on the base, however they obtain these all blended up the debit AR or credit merchandise.
inventory or they debit expense of products cost twenty 5 you recognize what I'' m stating? They understand that there are these 4 accounts.
they understand that there'' s these 2 collections numbers yet they can not figure what goes where you.
need to understand which ones go where right. This is in regards to the sale of the product.
the sales rate and just how much the client is mosting likely to pay us for what the sales price.
was right? Here is us dealing with the cost of it the.
price of the products sold our cost as the seller and after that we lower goods inventory,.
and also every little thing in our product supply is kept an eye on at price ok.So you was familiar with which number goes where.
and also which account goes where or you'' ll obtain it all incorrect. Yeah “can you still placed that phrase essentially.
that genuine thing?”” No the REAL that was good for AJEs doesn'' t. have any application right here ok this is among those points you simply kind of have to recognize. Ok but this is really an easy thing this is.
among several examples in this course of when you watch me do this I got this baby bring.
When I offer, it on I can take the test currently I can see what he is doing very easy shmeezy as well as after that.
you the quiz or the examination and also you have blank item of paper you'' re considering your going.
I understand that there was those four accounts, you see what I'' m claiming? I wear ' t understand where they go? You learn this course not by watching me you. learn this class by doing it as well as beginning it with a blank
item of'paper.Now let ' s do something actual quick ok let'' s. wear ' t consider your note simply get an empty piece of paper out conceal your power factors if.
you have them as well as have a look at the display as well as I want you to make the two journal access.
for this situation in purple. Disregard the sales price cut title.
for currently just focus on this product in purple as well as I'' ll provide you regarding a minute to make those. 2 journal entrances on an item of scrape paper for the June 8th purple situation.
so do that we be back in about a min.
( 33:30- 34:15 songs) ok what did that look.
like well we debit balance dues and credit history sales for the 6 thousand the larger.
quantities as well as we debit price of products marketed as well as you might abbreviate it GS if you like by.
the means as well as we credit report goods supply for the cost of the item which is thirty 5.
hundred usually mosting likely to be the reduced numbers make good sense? Kara? “” do you ever before have to make an account claiming.
like how much you made money?”” No that'' s really great that'' s an excellent
inquiry. we will eventually figure that out on our earnings statement mosting likely to the Elmo we keep.
track of our sales we maintain track of our price of goods marketed and we compute our profit we.
No we don ' t do we? We keep track of our incomes we keep track.
Ok so this is our situation to begin with.
They just have to give us ninety eight percent. of 6 thousand dollars which is fifty 8 eighty.
You with me? Now we lower the whole accounts receivable. cause they wear ' t owe us anymore although they just gave us fifty eight eighty they. wear ' t owe us any longer they capitalized on the price cut. What do we debit for that two percent? Well remember we credited product inventory. on the purchase side here we are mosting likely to debit that opposite profits account a called. sales discount rates are you with me? We are going to debit that
account called. sales discounts for one twenty are you with me? That ' s an opposite profits account it will certainly be. subtracted from sales and it will certainly allows us to calculate net sales reason we intend to keep. track of just how much sales discounts we have.Ok and review regarding this in your book to you.
paid a lot of cash for those things you could too utilize them. Allow ' s take place as well as consider some various other situations. below on June twelfth we sold merchandise costing four thousand for seventy 5 hundred on.
accounts. The debt terms were 2 ten net thirty. Ok the journal access we make we debit AR.
and credit scores sales for seventy five hundred we debit coast of items sold and credit score merchandise.
inventory for 4 thousand so they owe us seventy five hundred at this moment however what.
We charge account receivable we debit product. stock we attribute cost of products marketed however we do not
debit sales. We debit sales returns and allowances this.
put the product back right into our supply this reduced entry and this decreases the receivable. and also its going to end up impacting net sales
to make sure that net sales is less than our gross. sales right? Since we wear ' t intend to debit sales create. we desire to monitor sales returns as well as allowances individually ok.So how a lot does this consumer owe us at this. point they owed us seventy five hundred they returned eight hundred so they owed us sixty. seven hundred right? They pay us if they pay within the discount rate. period they determine their price cut based upon the amount due at
that time out the. Because there was an return there however they just have to provide us ninety, initial quantity. eight percent of sixty 7 hundred dollars.
( 40:15 -46:20 music
) ok okay'' s go over that. You didn ' t get your accounts blended up didn ' t. you? Ok you did that ' s alright id rather you do.
We debit sales returns as well as allowance ok. Just how much do they owe us? They only have to offer us fourteen seventy.
which was ninety 8 percent of the fifteen hundred ok. Does that make good sense? Any kind of inquiries on
that? Ok allow me provide you your research I ' m going. to warn you, you just had one issue to do for today right? This is among my longer homework project. Just prepare yourselves I'do this due to the fact that I love you.So what I want you to do for homework following. time oh the gasps. Bear in mind absolutely nothing is optional you wear ' t have. to find out any of this there ' s fast food jobs that are
abundant today ok. , if this is too difficult ok yet
I want desire to readReviewReview web pages one ninety with one ninety seven'.
That ' s your job I understand it ' s a little.