Yo, what up everybody??? we're going to depreciation right now, we're going to do a very
simple, going to tie into my other videos that i did, where you buy an asset for
$30,000 that's how much we bought the asset for. so this is
the equation, we are going to do straight-line Straight Line
there is straight line, there is sum of your digits, double declining balance, there's one and
a half times declining balance, but for our purposes here we're going to do
Straight Line, Straight-Line Depreciation, ok so
value of Asset / how many years you're going to Depreciate it for.
The IRS, will let you know, different assets are depreciated at different
amounts years, the IRS has guidelines as to how long vehicles are
five years. vehicles normal vehicles five years right now but you have to
check maybe, I'm not sure, vans are more, i think all vehicles are five, sorry
so
years of service
5 ok !!! value of asset, 30,000 now, so look that would be 6,000 a year
right?? 30,000 / 5 and that's 6,000 6,000 a year, thats saying that after
one year, the trucks going to be worth 24,000 After two
years, it's going to be worth 18,000 sorry, so 30,000
and this is 6,000 a year, now one year, 24,000 Two year
18,000
three-year 12,000 four year 6,000 five year 0 thats how you figure out your
Depreciation for straight line. take how much it's worth
/ the years of service, and that's how much you get here, and goes down
each year, this is also commonly, I mean in all the examples you are going to see,
you're going to see a salvage value, in real life
IRL, I don't know if you're really bringing a salvage value, but you know
on all the other examples your going to see, minus the Salvage value.
you know thats book life, so I guess, we'll go with that
we are going to say Salvage Value is 5000 so
after, so i was saying after the five years
your truck, is going to be worth five thousand. so that just means that
Am i Rollin?? that just means that you would 25,000 / 5, equals five thousand a year
ok so here we'll do that
so 30,000 you starting with. after the first year, worth 25,000 after the second year
20,000 15,000 10,000 after the fifth year 5,000 because thats your salvage value
anyways that's Depreciation, Straight Line, that's probably the most common
example, you know, I am a CPA, the last time I figured out how much
I mean you never do that, you punch in the tax program, tells you how much it is
and you put that in books, anyways PEACE !!!!!!!!!!