yo yo yo what's good with it welcome back family
this is accounting for beginners and what number we're gonna do today we're
gonna do 38 treinta y ocho can you believe it can you feel it can you feel
the heat we welcome back everybody welcome back knew it this one's huge
this one's we're gonna do retained earnings in 38 welcome back if it's your
first time you're like what's going on here what is going on
I am cpa strings i am the strongest CPA in florida playlist right here it is a
link it is the card to the best accounting playlist in the world on the
internet right here right here you me let's go let's do this alright
come on yeah we're gonna do CPA strengths what are you gonna do today
I'm gonna do retained earnings I feel like doing them retained earnings if you
haven't watched 37 you might want to go watch 37 that was on net income and that
37 directly the net income directly carries over into the retained earnings
so let's get into this now let's do some retained earnings as I was standing up
for this this morning I was like because I had a problem with retained earnings I
need to abbreviate into read because there were teachers to put on the board
already already so it was like reading rewriting like what's happening it was
just a mess I was writing up on this board how I wanted to try to explain
retained earnings and I was like this just seems too easy I opened my book and
and looked at retained earnings don't see that the DEF definition right here
net income retained in the business called retained earnings haha for real
now furuto sub retained earnings definition in the book as you just saw
is net retained in the business was retained
kept in kept in I had $20 I spent 10 I retained $10 they also have things
called like retainer retaining walls and that keeps in like dirt
I don't know retainers does that keeping your teeth but it's what you got left
it's retained its retained earnings retained earnings now this is also my
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credit asset draw expense liability equity revenue in the positive forums
the official retained earnings is net income retained in the business okay
stop Powell's let's do retained earnings balance sheet 1231 this is a balance
sheet regular assets equal liabilities plus equity is you know like journal
debits equal credits everything you know equals equals equals it's one of the
things I like about it counter I love about accounting is that everything
equals and you can check your work and it makes sense a 12 31 16 balance sheet
this was the balance sheet at the end of FB 37 when we did net income the 12 31
16 so this is the last day of the year now accompanying accompanying this 12 31
6 the last day of your balance sheet is an income statement for the entire year
January 1st through December 31st that would be the income statement with that
net income statement that I don't have here had a net income of a thousand so
we learnt net income from the income state transfers over to the balance
sheet and then let's look at our balance sheet at 12:31 16 we have cash of $1000
that's our asset assets equal equal equal equal a lot of
times it'll be different pages as well like this would assets will be on the
first page and then the liabilities and equities would be in the second page so
you can kind of just look at them like you know oh this one page is asked that
so you know whatever this this page equals this page which is liabilities
and equity those are sometimes pages it has to equal see how to ask that some
thousand dollars on the twelve thirty one 16 balance sheet last day of the
year it has to equal liabilities and equity we don't have any liabilities in
the we don't have any liabilities in the balance sheet in the only equity we have
is net income over thousand dollars so that equals assets equal a thousand
liabilities plus equity equals a thousand so we're good now that is the
last day so you're like dude this is retained earnings how we gonna get
retained earnings well it's really really really pretty simple I mean
building something changes as we go one day so 1231 you're a New Year's party in
you know next day Oh 101 seventeen the very next day for a balance sheet it's
just another day what happened at this day but it's the start of a new period
it's the start of a new year so you're also gonna have whatever whatever income
statement you had before that's old that's the best of 2016 income statement
now we're starting with a brand new for one one seventeen for the January
seventh for January 1st 2017 the first and 2017 you're gonna start with the new
income statement but simply net income just transfers over to retained earnings
that's really all it does so that's that's all that retained earnings is
it's just whatever whatever net income was on the last day
of the period or 12 31 16 the last day of the year you had they didn't come
over $1,000 the very next day you have this net income you have got $1,000 and
home you're like yes I got $1,000 net income I made a thousand dollars this
year cool well now we're on a whole new year
so now we have to be able to look on the balance sheet that's why it's on the top
we have to look real fast how you doing this year like with two seconds I can
look at your balance you go how you doing this year and that's because
that's because of the new there's gonna be a new net income on the new income
statement and a new balance sheet so this old net income transfers over to
retained earnings it's retained and it can retained in the business thousand
tender needs people just get started less thanked more do boom