yo yo yo what's going on everybody hope everybody's doing fabulous out there I
am CPA strength I am the strongest licensed CPA in the state of Florida
what up can you believe it man I'm feeling good welcome to my rating is in
whoo I'm going to show you right here that this is the best planets in the
world and it will make all your dreams come true if you're looking for
accounting if you're looking to level up level up and light power up step up all
the ups like the elevators like it's like fast very fast elevator over there
anyway this is accounting for beginners number 65 this is my classic series it's
the classics man you gotta get to classics the basics I teach the world
basic building blocks building blocks building blocks building blocks
accounting building blocks yawn top and top and top anyways we've been doing
depreciation and I'm just really excited for this one it is straight-line
depreciation examples not talk about the example in a second and we'll get
started I'll try to start the video fast I'll try not make this long but we all
know how that usually go through this I just blew a little bit but I've been
doing it I've been just like talking about you know like the theory or
whatever about a certain subject I did you know accumulated appreciation and
appreciation and I would straight-line differentiation then we did del
declining balance with residual values all kind of guidance without residual
value so now I just want to do I just read you an example this one you know
we're just going to do an example and then hopefully we can you you can use
some of the tools that I that I've taught you and so the tools I touch
calligraphy enforce might sell fun by looking at all these different videos
and yeah so let's get started and let's get started all right
what's the problem what's the problem sir sir go what's the problem what's
your problem sir hangin around on damn I'm going to pawned off so example or
the problem I'm not a problem and all right equipment acquired oh and just to
let you know I wrote it out exactly as it was in the book I have here so we're
doing oh shoot I will fell over anyways we're doing out
of the book we're doing the problems but I wanted to write it how the book wrote
it so we could like decipher this together I'm going on the slide you can
see I don't have the the answers written out yet so you can you can think about
this yourself you can hit Powell's put you on pause stop like a comma
that's a thistle dance the fizzle dance roof isn't pieced on Mac drizzle a sari
do them for minutes okay so it's about about normal right equipment acquired
beginning of year at a cost of one hundred and twenty five thousand dollars
with an estimated useful life of ten years and an estimated residual value of
five thousand dollars what do we what do we want to keen on for depreciation what
do we need we need the cost so what is depreciation only we're trying to
expense it over a period of time thus audacity expense it over a period of
time so we want to do it you know equally or accelerated or in this this
case straight-line I would think it'd be very like basic or like if you think
about it what do you need to know how to depreciate well you definitely need to
know how much it cost I ain't come on or you definitely I know how much the
things cost right I mean please so so the other thing
you're going to need to know is how far to depreciate it what is what is the
book value going to be when you're done with it or what's the residual value or
you know when you're done with when you're done using this week this
equipment in your business what's it going to be worth when it's all done
that's the residual value so you're going to have to know what that is
because you're not going to want to depreciate the equipment further than
that so if you're going to have to know the residual value of 5,000 and you're
going to have to know once you figure out the amount to depreciate how how
many years so you have to figure out the the pre-event appreciable value how many
you know years to divide that by or how many years to appreciate that by sorry
ten years does anybody remember the straight-line formula it's what what is
the straight line formula now I don't even I have a draw written down haven't
done it in a couple days or a week whatever but so I'm thinking I just
picked out these three things so you're going to need cost right you're going to
cost - residual value / useful life so we have all those things and it said
it's acquired at the beginning of the year because that is that does matter
you know because if you would say what about it half the year you would only
take half the amount of depreciation because you're doing depreciation for
the whole year so you would
I usually if I had months this is a little segue or whatever but if you
don't have a full year I would what would I do i / I would get the ante I
get the annual amount for the full year I divide by 12 so that would make the
monthly amount and then I would multiply it by how many months there is but
that's a little side note if that freaks you out don't worry about it I'm sorry I
even mentioned it but at the beginning you're so you're going to pull your
depreciation here but anyways it wants to know that the three questions are
determined and percival cost be the straight line rate and see the annual
straight-line depreciation alright to answer these is going this is
going to be pretty easy peasy lemon squeeze or we can go to Shawshank
Redemption what's the guy's name bro Brooks
easy peasy japanesey but I'm feeling like the Austin Powers easy peasy lemon
squeezy for this right here alright let's do it the depreciable cost what is
the diversion will cost well they don't tell it to you here but
or do you think it what what what do you think it is remember well you you bought
it for this amount 125,000 the cost minus residual value is the depreciable
cost because that's what you are going to depreciate the item the asset buy so
it would simply be 125 125 thousand minus 5
thousand equalling 120,000 so the pressure will cost is 120 thousand and
that's the answer to a alright straight line rate how we're going to figure this
out here ten years it's ten years what one divided by ten is ten percent that's
the straight line rate because we're trying to figure out the useful life of
ten years right so we're going to do 1 divided by 10 because we're trying to
get per year out of these 10 how to do it so one out of ten that's ten one one
out of ten at ten percent there's going to be ten of them you're eight right 10
20 30 40 50 60 70 80 90 100 yeah boy 10 percent is the straight line rate that's
the answer number B and the annual straight-line depreciation now how we
get that because all day they kind of just led us right into that you know how
would you get the annual straight-line depreciation well it would be our
formula here cost - residual value which is the depreciable cost over the useful
life does that make sense to this you've got now a 125,000 dollars that's an
asset so you don't have any expense yet so it's fill su $125,000 is going to
last you 10 years so you just you know divide one hundred and twenty-five
thousand dollars divided by ten but but these may look good but there's a
residual value of five thousand so you can't depreciate all of that
125,000 you got to save five on the back end so you're just going to do one
hundred and twenty one hundred and twenty thousand dollars and that's right
that's your depreciable value one hundred and twenty thousand dollars
divided right one hundred and twenty K divided by ten years equals is it oh
jesus twelve thousand a year I hope so straight-line depreciation twelve
thousand put GIS I just I just figured it out
because I just second out what does it all mean so yeah if you do twelve
thousand a year for ten years one two three four five six seven eight nine ten
that's gonna be hundred twenty thousand it's going to leave you with five
thousand left over and that's going to be a residual cost all right I believe
that is and that is going to be the end for this one I guess now now I can talk
for a few minutes I mean I want to I want to leave this on a positive note
got to stay positive we got to try to better ourselves okay one foot in front
of the other and I got a comment from someone the other day saying oh he's 32
thing right go back to school and you know uh but he's motivated you watch one
of my earlier videos and stuff and I was thinking yeah that's great now I left a
message directly you know if you're watching this thinking like you can't do
it you can't do this or whatever wherever it has those doubts but you
just got to keep pushing through and I can tell you where I walked into the
community college eight years ago I mean I was scared I was so nervous you know I
had doubts then I had doubt the whole way through I still have doubts today
but I just keep on pushing on and you know that was one of the best decisions
I've ever made my entire life was walking to fit Community College and
tell them I want to be a certified public accountant anyways dreams do come
true I got more dreams I'm always I'm always dreaming big so anyways let's do
this we'll stay positive I hope to see in the next video it's going to be fun
it's going to be fun I can tell you that deuces