what everybody?? We back for some more action. Let's go !!!! Now
we're going to Depreciate what we did in the previous accounting video, we're
going to Depreciate this truck, in the next video i'll say how we came up with a
Depreciation, but let's just say, that we came up with our
depreciation. Depreciation is going to be five thousand dollars for the year.
alright, the truck Depreciates 5,000 year
ok , so what's the journal entry for that??
how do you do that?? ok, now let me fill you in on something
this truck is already on the books
ok, these are books, this is our Balance Sheet truck is already on there. you don't
touch the truck account unless you sell it. until you scrap it. or sell it. you
don't touch it when you do depreciation you lower the value with account called
accumulated depreciation which is a contra asset
ok , we have to do our DC/ADE/LER and if you don't know want this
is by now
shame on you, or watch my other videos. okay, SRS !!! where was I?
ok, so you don't touch the the actual truck account until you do
something with the vehicle, so Depreciate 5,000 year
and the journal entry for that, you've heard of, its an Expense, Depreciation
Expense
ok, so we're going to say here Depreciation
look, that's our debit right here, that's our debit expense
ok, Depreciation Expense for the truck, we say Depreciation
Expense, ok, we determine that it's gonna be five thousand dollars for this year
Depreciation Expense 5,000 and what's going to be our credit??
what's going to be our credit?? we're going to use a term called
Accumulated Depreciation. and it's going to accumulate, so it's going to go up
every year until it reaches a certain point. or you sell or whatever, but its the
first year it's on the books, so our Credit is gonna be Accumulated Depreciation you
Accumulated Depreciation that going to be 5,000 So that's our credit
alright, that's our credit, so you got Debit / Credit matches. now how's that look?
how's that gonna look on the Balance Sheet??? because now
your truck Depreciate $5,000 it was 30
so now it's only worth twenty-five thousand dollars, but please don't go
into the truck account, and less than that by five dollars, or 5,000 don't do
that, you do with Accumulated Depreciation, see this is the Journal
entry for
Depreciation. Debit: Depreciation Expense Credit: Accumulated Depreciation
this would be truck you want it because you're going to have different maybe
different Assets different things you accumulate so now this is how the the
Balance Sheet would look, if we if we did that, we're going to say this is
our only Expense, Depreciation Expense was our only expense for the year.
for this example, so you have a truck, then you have a you have
Accumulated Depreciation 5,000 the parentheses is a negative so then you
have 25,000 in your fixed assets
ok, so you didn't touch the truck account. you just messed with the Accumulated
Depreciation account for the truck.
okay, so anyways this isn't going to be 80 any more, because you're 15 cash and
twenty-five thousand in fixed Assets, it's going to be 75,000 Fucking rough 7
huh ??
Damn, i am getting big boy !!!!
your net income because you had an expensive 5,000 this is going to change
15,000 doesn't Expense, it's going to lower your profit, your income, and that's
gonna change this to 75,000 So that's how you book a
Depreciation entry. PEACE !!!!!!!!!!