yo yo yo what's good with it you know what this is this is accounting for
beginners this is my classic series and who are you man I'm CPH strange men on
the strongest CPA in Florida I only want to do much much intro much shenanigans
I've had a rough morning they try to lock me outside my office y'all I
couldn't even get my key fob it's a crazy world out there I know you guys
are probably had a hectic morning or night or let's just what you're hearing
now because you got a study and I'm here now because I'm gonna teach you some
accounting let's just try block off his crazy world let's do some numbers some
accounting some fun stuff let's get into
it Oh now if your like you're kind of I
don't know you seem a little different you kind of cool you got almost 20,000
subscribers what you doing over here boy well you can go to the playlist here
it's the best accounting playlist in the world and that's what it is it will help
you on like along with thousands of other people learn how to do accounting
pass your classes make them chippers boy you could be a CPA like me you know know
anyways I didn't really know what to call this one I just call it what what
is the equity what is that equity voice this is accounting for beginners number
39 what is the equity I believe in 37 when
we did net income we had net income of $1000 and then in 38 we did retained
earnings and the thousand dollars of net income just pretty much we went from the
last day of the year to the first day of the year and from the last day of the
year the net in the the net income turns into retained earnings on the new day of
the year so we had the net income a FB 37 turned into a thousand dollars
of retained earnings an IFB 38 now 39 we're going a whole nother year we're
doing a whole nother year now we're gonna enter a year we have
retained earnings does all our is all in our balance sheet now the little the
thing we're going to do different this yours can have another year are the
business-to-business gonna keep on rolling so things things have been going
pretty good but we're going to add in two things been going so good we're
actually gonna have a draw or a shareholders should be should or a
dividend or a withdraw or a personal expense the little difference that we're
gonna have in this video that's what's kind of every thirty nine what is the
equity it's going to be like a shareholder distribution balance sheet
so so let's go let's say we've had let's go keep our business again and now we're
in our last day we ran into our balance sheet we're trying to prepare a balance
sheet get ready for the last day of the other year 12 31 16 let's look at our
balance sheet all right and see how the stronger distribution the equity portion
no distribution retained earnings and income affects the balance sheet in the
last day of the year and the first day of the new year now
both examples we have $2,500 in cash in the bank account that's that's both but
the last day of the first day because we're not changing the bank account I
feel a Miss without something we love pin in my hand
sorry about that sorry about that y'all man it's like it's so serious right
let's not be so serious don't be so serious let's have some fun
enjoy life you know it okay we are you know the balance sheet is
assets equal liabilities plus equity assets equals equals equals
equals liabilities we have no liabilities now have 2500 dollars cash
and in our equity we have $1,000 or retain earnings that was from the
beginning of the year the whole year we've got $1,000 of retainer ins and
that's been on our balance sheet the whole year and it hasn't changed it's
just been what we retained from the previous year this year so that hasn't
changed what has changed this year this time we
had we had a job for I think three thousand dollars and then our our rent
is still a thousand dollars so anyways we ended up with our first group is this
weighted up with net income of $1000 but this year wind up with net income of
$2000 so we're making more money than before we're doubling our efforts we're
doing good we're liking this we're in the zone where I start putting more
efforts forward I'm sluggin first out here on everything try to make
everything shake you know it try to get these chippers up boy okay let's go
let's go boy let's go I'm awake now come on go oh I don't even know where I was
anymore they were doing the previous year's okay so oh we're making money
saving exciting I'm making money so I made doubled efforts so that's on our
equity we had a thousand dollars retainer me $2,000 there hidden from
Johnsons we're doing so good I said you know what hmm I'm gonna run
the business from the business bank account I'm gonna write a check out to
me personally so I'm gonna take a shit off $500 shareholder distribution I'm
going to take a $500 withdraw if this was a c-corp and you paid the owners of
the business it would be a dividend but anyways our personal expense I'm gonna
take it for me myself and I'm good some 500 our chipper internal distribution
non-tax money coming in my pockets you know
that's what's up so anyways for the business though that's gonna take away
$500 from the equity on Cheryl or distribution so you would signify it
under the equity is this is a negative the parentheses a negative sum it would
be negative $500 under the equity section next to the drawstring motor so
you have $1000 retained earnings $2,000 net income - $500 draw her distribution
so your equity section will be $2,500 with these three components so assets
equal liabilities plus secondary 2500 equals 2500 so this checks have good
you're like you're all happy a good year but hey father time doesn't doesn't stop
right you're partying on New Year's Eve party party party party 12:01 hits
you're like man I'm stopping partying to New Year I better go do my books I
better go do a journal entry it Oh 101 17 not really get around to when you get
to a but what happens on the balance sheet just just I guess in one minute
the change of the last day of the year of the first day of the year will really
no no business transactions have happened you know we're just getting
ready from you know out of the old in with the new so that was our year before
this is our new year so I still have the same amount of cash anyway you still
have the same amount of cash still have new liabilities you know if you notice
over here we had retained earnings of a thousand on the last day of the year the
first day of the new year we got retained earnings of 2500 well how is
that because we already had retained earnings of a thousand we had we made
two thousand more so we have three thousand dollars in our business we took
out five hundred so that means we have twenty five hundred dollars of earnings
that we retained in the business to flip over for the next year and that's what
doing so in the first day of the new year on the balance sheet we have
retained retained earnings $2,500 and that's how much we're having cash so
assets $2,500 cash equals liabilities nothing plus equity or retained earnings
is the only thing in our equity because we have we don't have any transactions
yet and it equals and so I'll I'll put on net income over here jump cut buoy so
I just doing like net income 0 of char distribution 0 cuz you haven't had any
transactions but we haven't there's just like a minute went by in the clock
that's it's it's you know the first couple of minutes of the new year and we
are doing this journal entry in the book so we haven't had time to make any more
money or a loss we haven't had any revenue more expenses so we don't have
any net income and we haven't had any time to take out any personal expenses
yet all the ATMs are open forever so I haven't taken any money out Oh mmm this
is what I can do and go for the Heisman boy goin for the Heisman mm-hmm hey
we're almost at 20,000 people's I am gonna have to do a 20,000 video if you
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Thursday so you're gonna see this Friday morning have a great weekend and I'll
see you for a new video Monday morning peace