If you're running a small business and you want to calculate depreciation,
you might find this fixed asset schedule to be useful. What we're going to do is,
we're going to walk through how to use it by just stepping through these
examples that I have on here and explaining what's happening. As we go
through this, you can grab this file, if you want, and just walk through it along
with the video. You can make a copy of it, put it in your own Drive, and do anything
you want with it. It can be yours. There's also an affiliate link there too.
G Suite, which is Google's offering of Google Sheets, Docs, Gmail for your
business, so you can use your own custom email address with Gmail if you're
interested. Check it out. Let's act like you went out and
bought a band saw in February 2018. You come in here, you give it a sequential
number, give it a description, and you write down the date it was placed in
service. So far, none of these are driving a formula, okay? So you're just typing it
in for your reference. We're going to come back to a disposal date because you
haven't done that yet. Let's look at the journal entry. At to this point, assuming
you're not doing accrual basis accounting, you're just doing cash, what
you did was you debited equipment for $2,103 and you spent $2,103 in cash to get
it. Let's come up. We're at that point. Here's the $2,103. We
complete the month of February. We're going to use a convention for this just
saying, hey let's just depreciate it for the full month that you put the asset in.
Don't bother prorating. It's going wash out. We do one full month in February.
This is where a formula comes in. I'm gonna double click on the cell and
it's going to show us that I'm using the straight-line formula SLN. There are
formulas that have accelerated methods of depreciation, but as long as you're
doing internal record-keeping, you're typically not going to want to use those.
The arguments that straight line looks for are, if we left click on the formula,
Google will tell us what it's looking for. It needs the cost. What I've
done here is, I've put in a fixed column cell reference that looks at the cost
and I put that dollar sign before the E7 so that, when we drag this formula to the
right to calculate subsequent months, it's still looking at column E. There's
the same thing with salvage value. In this case, we say look, this has no
salvage value. We're going to use a bandsaw, and when we're done with it, we're
probably going to have to recycle it. Then, it looks for the life. You'll
notice, I use the life in months. That way, you can do it for every month
because you're typically not putting it in right on January 1st. I'm going to hit
the Escape key and get out of this. What we've done so far is we've
calculated one month of depreciation. Drag this formula to the right, which has
already been done. If you go into the cell, and your cursor turns into a plus
sign, then you can left-click and drag it over. I'm going to scroll to the right to show
you, I depreciated this through July because I'm saying that we dispose of it
on July 5th. Before we look at the disposal though, let's double click to
cell 2018. What these cells are doing, for each year, is that they're summing twelve
months. If I double click in 2018, it's going to grab all the depreciation for
this asset and it would have done it all the way through December had I not
disposed of it. That's going to give you monthly journal entries if you come
over here and you sum those. As a matter of fact, let's just do that live.
Drag this formula over, your depreciation expense for the month of February is
$35.05. Let's scroll down to see how you would record that. You would debit
depreciation expense for $35.05 and then you a credit accumulated depreciation
because it has to go somewhere. This creates a contra asset that reduces the
net value of your fixed assets on your balance sheet. This is an income
statement entry, this is a balance sheet entry. Let's scroll back up. What
happens next is, in July, we just find out that we want to get rid of the asset. For
whatever reason, we're not getting any money for it, so let's come down here and
we're going to use this disposals row. Copy the asset number and the
description. Let's get rid of that too, it's bothering me. Say you dispose of it in
July. Again, this July is not driving any formula. It's
just as a reminder for when to shut off the depreciation. We're backing out the
entire cost, taking it all off of the balance sheet. We don't undo the
depreciation expense, but this is here to back out the accumulated. We'll come back
to that in a second. This is just showing that the net book value of what
you got rid of was $1,893. I know this is a little bit complicated to
understand, but bear with me. If we scroll down, these are the numbers that
you should end up with at the end of the year on your balance sheet and your
income statement. Before we talk about the end of the year entries, we
need to record the disposal of asset number one. You need to back out the
entire amount of the cost of equipment and then you're backing out the
accumulated depreciation. The accumulated, if we go back up, is right
here. Back that out by debiting it. If you look at the accumulated, you would have
credited $210.30 through July for it, so this is going to wipe out the
accumulated associated with that asset. Then you have to book a loss on
disposal because you got nothing for it. It wasn't worth $2,103. You already expensed
some of it. You're saying some of it already wore out. You say, look, it's really a
$1,900 loss. That would be the journal entry in July. Come back up here. Last
thing to see is that, kind of plugged in at the end here because it has to roll
forward, the accumulated at the end of 2018 is what you start with in 2019.
Then, you add the depreciation expense onto it, and then this is what
you should end with in 2019 assuming you didn't dispose of anything else and you
didn't add anything else. These formulas are kind of lightweight and they're
meant to be that way just to keep this flexible because I'm sure whoever uses
it is going to use it a little bit differently. You're going to have to add
years, you'll have to pull things down as you add more assets, and you should be
able to click in these formulas and kind of figure out what to do. So, they're just
a SUM formula and the most complicated formula in here is straight line (SLN) and
that's not too bad either. I hope that was helpful. If you want
to see another Google Sheets accounting video, we have one
thumbnail that should be showing right now that shows you how to track
inventory for a small business. If you like this video,
it'd be great if you could subscribe. Thanks.