yoyoyo CPA strength here you know who it is I'm a strongest licensed CPA in the
state of Florida and what do I do I teach the world over accounting by
building block building block building block by basics you know what it is a
hey if you don't know what it is check out this playlist over here
because it happens to be the best playlist in the whole entire world and
make all your dreams just take the pledge hit the playlist man come on look
what look what number this is you happen to be one of those lucky people in the
world to see my classic series this is my classic series man this is number 84
of my classic series this is depreciation we're gonna do a
depreciation expense at the end of the year 1231 15 this is I know this is our
journal entry per month making this our twelve yes this is our 12th because this
is a twelfth month our twelfth journal entry of our widgets Inc we've gone a
whole year so now we're gonna do that and this adjusting entry we might do
more adjusting entries all right I want to show you this is the VCL or this is
why I'm pretty popular James Bond right Charlie's Angels whoo
obi-wan Kenobi glowsticks no DC blur Democrat I said draw expense liability
equity revenue this is what I'm known for this is this has helpful tons and
tons and tons of people anyways I don't want to stick too much on this
depreciation it's a depreciation journal entry I've
done I think three or four depreciation journal entries I've done a whole
separate video on accumulated depreciation and how it's a contra asset
probably if you don't understand this journal entry you might want to go back
to an older video to understand a difference
and journal entry or you can watch this but no I have other ones about that this
is going to be I like I like how our journal entries affect our chart of
account or general ledger or balance sheet our income statement that's kind
of where I think this this particular widget Inc is kind of what I'm trying to
focus more on so anyways let's go to this journal entry 12:30 1:15 last day
of the year budget incorporated makes a depreciation journal entry for $800 and
adjusting and just an entry so would that be well I mean we figured out it
was $800 now I think what is important on that that is we took I took us
straight we took a straight line because we only made $3,200 of profit this year
in our business you'll see us our last
well you know what we just took straight line we didn't want to take accelerated
depreciation because we didn't need more expense and you'll see because because
we only made $3,200 so we're not gonna have to pay much taxes right now or
hardly or any taxes the way it's gonna work out we're not any taxes so why
would we want to take more expenses when we already don't have to pay taxes now
we're gonna work so we don't want sometimes that's not the case and you
would want to take accelerated depreciation more expenses now that's
not our case because we were hoping to have safe use our if we use all our
expense up now on this depreciation expense excuse me we wouldn't have any
for we wouldn't have your depreciation expense four percent next year but next
year we're hoping to have a nice sizable profit so say we make forty fifty
thousand dollars next year and we don't take much depreciate much depreciation
this year we still have some depreciation for next for the year that
we we have with a made forty or fifty thousand dollars so it can actually
that depreciation expense could actually benefit you hope that made sense that
concept right there took me a couple years to actually kind of figure out so
don't worry if you're like wow anyways and this is a great part of the online
learning no one knows if you're sitting over there going I don't know what's
going on so I love you online learning anyways how do you do a depreciation
entry for $800 I have to move fast off this board since I talk too much
well we know depreciation its depreciation expense and then that's a
debit expenses are debit in positive form then this is a weird one the credit
for depreciation expense is a weird one it's accumulated depreciation it's a
contrast and I've gone over it before so that's gonna be the credit accumulated
depreciation 800 it's a contra asset let's see so it's kind of it's going
down so it's a C it's a contra asset because I'd normal asset has a positive
debit and this is a contra asset because it has a positive credit it's kind of
weird but anyways that's the credit the damaged depreciation expense 800 dollars
and it's an expense so as you can see NDC you learn expense going up as a
debit and that's the journal entry let's go to the next board
yoyoyo I think you can see me only for tune going too soon one are you eight
all right what do we do in chart of accounts we added two new accounts we
had depreciation expense and accumulated depreciation so it was the last journal
entry of the year and we did not have depreciation yet on our books is our
first year in so we had to add chart of accounts it is an asset to contrast that
but we'll go under the assets and chart of accounts as an asset I change the
reason of all assets over there right and under expenses we got a depreciation
expense so we added two new accounts we did our turn on tree nor in our chart of
accounts have we had two new account souls let's
click inside of each account let's click inside depreciation expense on 1231 we
have $800 let's go up here to accumulate depreciation click inside there and
let's get the accumulative preciate in here at 1231 15 it's $800 so both these
accounts are brand new fresh there exercise is the debit is the credit when
they're both at $800 now good I have got a couple minutes well I go to the
balance sheet income statement alright hopefully here we can talk here
what I'm saying long hair don't care right hopefully yo right hopefully we're
going to talk about the balance sheet the income statement right here for a
couple of minutes all right yeah all right all about depreciation
depreciation expense how it affects the income statement in the balance sheet
now this is an adjusting entry you might have more entries at 1231 15 typical to
have what's going on okay everything's good typical to have a couple of dusting
entries so see what two accounts did we mess with we master the depreciation
expense which is an expense of $800 and we did accumulated depreciation which is
a contra asset of $800 we'll get to that secondly let's go over to what to
pressure our depreciation expense journal entry did to our income
statement now this is the last day of the year here so let's look at that
period the whole year 1 115 is 12 31 15 the whole year period through the whole
year we ended up with 22,000 of widget service and 18,800 dollars of expenses
but comprised of $800 of the depreciation expense that we just did oh
man I should have Isaac as you can plainly see see we did not use the
checking account this is one of this is an adjusting entry which we do we're not
using the checking account we you said when we bought the truck though
right now we're kind of reducing what the trucks worth but we're gonna get to
that in a second so this is what happened and you are our
journal entry affected income statement and affected the balance sheet in this
occasion which happens quite often a lot of times you have an expense and in
something in the checking accounts you have an expense and asset Haley's 20 mm
- eighteen thousand eight hundred is 3200 net income see well so anyways the
net income from the income statement flows over to the net income to the
balance sheet and under the equity so a balance sheet is assets equal
liabilities plus equity look our liabilities didn't change our equity did
change our equity reduced by eight hundred dollars in the way of net income
because our net income reduced by $800 because of our depreciation expense
because we hadn't it added expense so if assets equal liabilities plus
equity and our equity's been reduced because their net income has been
reduced so liabilities and equities have been reduced what's going on with the
assets well the assets have been reduced as well with the accumulated
depreciation it's been reduced by eight hundred dollars and see the truck is now
worth thirty two hundred dollars and our assets are fifteen thousand two hundred
dollars which equals fifteen thousand two hundred hours liability equity all
right a couple minutes good good good um so let's talk about why we do the
journal entries the way we do or why I think we do it we've made one journal
entry with the truck before when we first purchased it when we messed with
the truck in the checking account but that's for four thousand dollars so now
this is the way the balance sheets filled up checking account twelve
thousand truck or whatever asset four four
and your Kili depreciation of whatever fixed asset for a certain amount we have
$800 and then it's going to show you what what the truck what the fixed asset
is worth now currently 3200 in our case what I'm looking at the one I'm just
glancing over the balance sheet real quick it's nice it's gonna have a
section I don't really have the room I'm sorry for all sex but I don't want to
differentiate either that much but on a balance sheet they're gonna have look at
a balance sheet in your books or Google one for fixed fixed assets this is what
the truck is and that's what you would depreciate a fixed asset I mean you
don't appreciate everything you depreciate fixed assets okay you would
notice looking at the balance sheet you would notice okay they bought this for
$4,000 they bought this truck for $4,000 it's been depreciated for $800 it has
it's worth $3,200 more on the balance sheet you know you could see and you are
you I would leave this on the balance sheet like after it's fully depreciated
I would still leave it on there so it kind of tells a lot I tells it tells
pretty much what it was purchased for ah how much depreciation has been taken and
then I guess you know how what it's worth on the books currently and it
tells you that by how we do the journal entries and as you can see accumulated
depreciation is a contra asset because it's up with the assets but it's contra
because it's subtracted from the asset so it's kind of weird but I think you
know all the journal entries of depreciation expense and accumulated
depreciation credit how much time do I got oh my god I'm almost running out of
time okay I'm doing great
well I'm doing really good trying to be positive and it's really weird things
are just following in my lap and there's nothing I enjoy more than the
you to process like I love the YouTube process of learning so much about myself
feeling a little lost before I found the YouTube anyways I just feel really
fulfilled doing these videos I have different people tell me like how proud
they're like family members telling me how proud they are like my aunt
I just got text message you know for my aunt yesterday from Texas and she was
like hey man we're so proud of you you know she said hey John hey man I'm so
proud of you and so just means a lot you know yeah and I wouldn't be I'll take
that compliment as well until I've been learning on the youtubes that to take
the compliment along with the Hayden
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