yo yo yo what's going on rain hey you know it is CPA strength strongest CPA in
the state of Florida licensee fear that is what do you do over your CP in
strength what do you do I teach the world accounting by the basic building
block by building block by building blocks you know what I'm saying this
happens to be your first time here welcome hope to see you again why I got
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more and more every day like a genie bottle rub it dreams come true enough
said about that let's get into today's action what today's action this is my
classic series to class all love a good classic series this is my classic series
accounting for beginners this is number 60 this is a 60s installment right after
59 right before 61 it's so special it's got its own video number 60 so specially
by little video what are we doing in number 60 we're doing accumulated
depreciation we're talking about accumulated depreciation we're talking
about what is it where does it show up in the balance sheet what's the deal
with it like Lex it all about I took a picture I went on the internet and HTT
path slash forward slash Google search something go to my photos so here's what
I did now how much I do a split screen of what I'm looking at on my phone here
you know this is the foot one of the first balance sheets that I came up
across when I searched balance sheet in Google search so you can search a
balance sheet and try this out just search a balance sheet on Google
and look try a different one that's not this Blue Lagoon water resort park I
just want you to notice that on this one on one that you pull up at all my
examples and on every other example you will see it's always going to be assets
equal liabilities plus equity now out now we're going to zoom into this this
is my mapping system DC a blur debit credit etc experience liability equity
revenue if an asset is going up in value or increasing it's going to be debit if
an asset is decreasing it would be a credit accumulated depreciation is a
contra asset that's the first thing I have a my lord
it's a contra asset that's what that's what you would need to remember because
you already know very no DCA's or because you've been writing that on on
your paper every day forever and then you see something about depreciate a
cumulative preciate or make a journal entry with depreciation expense and you
don't know what's going on or you have a question about accumulate depreciation
you don't know what's going on if you can if you can remember accumulated
depreciation as a contra asset you know that you don't even have to remember a
cut it's called contrast and you can just remember that it's seen in reason
they call it contrasted contrary to what normally happens normally normally you
have a if it's if it's increasing you have a normal balance of an asset of a
debit now with the contra asset of accumulated
appreciation I think if team on a depreciation might be the only contra
asset out there I'm sure there's other ones but still when I can think of it
it's the most prevalent one so let up so the contra asset
contrary to normal ones it is a positive credit balance but cons it's to contrast
against contrary to normal posit is a positive credit it's a
positive credit the positive credits a contra asset
set contra what's that for the 30 men unconscious game left left left a up
down the select B LT effect this balance sheet here let's get back to this barrel
cheat now you notice on 90 notice miss balance sheet look at the bottom assets
46 9 $491 950 and that equals liabilities and equity which is 46
million 491 950,000 so as you can see
assets equal liabilities plus equity and that is on that is the ballot that is
the valid sheet and you can see they equals so these entity one of the reason
DC are so handy because it has the balance sheet in it assets equal
liabilities plus equity so I want you to see that that equal to o is going to
equal assets are always an equal liabilities plus equity now let's look
over on the asset side I just want what's go to the opposite side has
current assets under current assets it has investments under that property
equipment then under that what property being equipment they have I label I
label my my balance sheet fixed asset or and they have theirs property equipment
doesn't really the differences a small difference their land building
furnishings and equipment then they after that they have less accumulated
depreciation and they subtract that that means less they subtract the humid
appreciation from the rest of the property equipment and then they get net
property equipment so if you're looking at this in a glance you can see the the
book value or the net you know the net value of the property plant equipment
or the fixed assets you can you can glance at that they don't tally them up
but let's see you you would be able to see that the lamp the property equipment
you know was bought for 30 36 million there is a four and a half million of
accumulated depreciation so the net 32 million you know so there's 32 million
you know land is not depreciable so you would so you could subtract that by the
net so it's at 25 25 25 million more to depreciate on on those assets notice I'm
just saying you know what I see on this balance sheet and so that's that's
accumulated depreciation when you know in a company is I just want to show you
a balance sheet that you could find from anywhere enough of that
I'll get it's really digging to accumulate depreciation read my board
right and stay focused so I already told I've already went over
to contracts that blah blah blah yeah it's contrary because it's a credit to
credit it's like it's in the credit for positive what's the journal entry for
the stimulus appreciation when are you going to see to like appreciation when
you going to run along a particular depreciation when let's think about what
cumulated depreciation is this depreciation that accumulates you have
depreciation from one year depreciation expense it sits in your accumulated
depreciation pile you have depreciation expense in another year and it goes in
the accumulation to pile every depreciation expense goes over to
accumulated depreciation as well so in eight cumulates it keeps going up and up
and up every year the journal entry I believe unless you have like some
corrective inch I mean I ninety-nine point nine of your I'm reliable in here
and if I'm wrong let me know if you think you're going to current not like
not a correct but this is going to be your journal
entry here so if you have depreciation or accumulated depreciation and you
don't know anything this is me oh this is going to be the journal entry you're
going to debit depreciation expense so sleep so this one you have debit
depreciation expense 1,000 create accumulated depreciation of a thousand
that's going to be the journal entry you can have a debit depreciation expense
crediting accumulated depreciation why is it like that because you're you
are expensing your expensing the asset via depreciation expense I'm going to
answer an unknown over there going to be out of their mind so this will be the
journal journal journal entry for accumulated depreciation so if you can't
remember here the journal entry or it's a contra asset I want you to think about
so I just showed you the balance sheet before so I want you to think about what
what is what it's doing what accumulated depreciation is doing so I have on my
belt just a balance sheet here 1231 16 assets I have winter assets I have fixed
assets under the face assets I have a truck for a salad for $5,000 so I know
if I see that on the balance sheet I know assets I know out sets on the
balance sheet I hope balance sheets asset to liability select me if I see
that I know it's five o'clock I know it was worth $5,000 when it was purchased i
was the purchase price then i see human a depreciation - two thousand dollars on
the balance sheet so I not have total fixed assets of three thousand dollars
now you say whoa time out time out time out you think you
thought you got me out so right you're right here this journal entry is only
for $1000 you know this was for this year this was in 20 this was a 2016
journal entry right for $1000 so now if on the balance sheet it has $2,000 to
accumulated depreciation this is my the balanced on top but you'd be thinking
at there was probably you know this truck was not bought during this year
because the depreciation expense this year was a thousand dollars because
you'd look right under the balance sheet the income statement see what was the
differentiation expense for this year was only a thousand dollars why has
accumulated depreciation two thousand dollars
well they had a thousand dollars from a prior year sort of cumulate so it's
totaled two thousand dollars okay so the truck
has three thousand dollars left appreciations probably got a couple more
years of depreciation left so you can glean glean all that or whatever from
looking at the balance sheet for a couple seconds and that's kind of why
it's done like that now to have a negative on the balance to have a
negative a negative amount on the balance sheet for assets is is rarey
already then we also want to tell you the CRA children or depreciation expense
and keenly depreciation are like you're like biffle's best friends forever
forever they're always together I don't think you're going to see one without
the other ever there biffle's oh you're going to
being journal entries together and this was the definition in the book
accumulate depreciation is the contra asset account credited when recording
the depreciation of a fixed asset that's a definition of the book let's try to
make this a short one and one really long again it's all about accumulate
depreciation thank you for watching this is going to be the end of the video I
hope to see you for the next one in 61 if you liked it please like like share
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