Sum of the Years' Digits Depreciation
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- เผยแพร่เมื่อ 29 ธ.ค. 2024
- This video explains the sum-of-the-years'-digits depreciation method, and illustrates how to calculate depreciation expense using the sum-of-the-years'-digits depreciation method.
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You made in 10 minutes what my Finance teacher couldnt do in 3 hours
In class most of the teachers try to make the subject too complex than what it actually is. It makes them feel that they are important and achieved something lol. Unfortunately, its how it is in Engineering.
This is so in point.
@Lucca Jamal both of you shut the fuck up, spammers
fantastic mate, really got it. you've got a strong appreciation of clarity.
Thank you my friend!
This videos is 5 years old and still does a better job than McGraw Hill 2019/2020 Accounting books. Thank you. The was easy.
Hey man, thank you so much for the help! I heard you apologizing multiple times for your penmanship and other things. Just wanted to say, there's no need to apologize! :-) We appreciate you and the favor you're doing for us :-)
Excellent explanation throughout the entirety of this video, you made it crystal clear!
TH-cam should give more money to teachers than other content creators ....love from Nepal ❤️
Thanks for the great video! You were able to show figuring out the fraction in a much friendlier fashion than the way my teacher explained it.
+John Vizintos I'm glad you liked it!
For a beginner , it's a good start by learning through this video...
I appreciate this depreciation video.
nice
Better than Becker! It’s been years since I’ve studied this! Thank you for the refresher
Well explained and informative massive thanks Sir After more than 9yrs we're here if you plan to do attendance here forget my absent On 7th august 2024 and 4ever 🙏🙏🙏🙏
Thank you so much for this video. Good grief. You're a godsend.
No problem!
Thank you very much. This made it much more easy to understand.
Brilliant video. Very useful
Thank you!
Thank you for this. I was really struggling to understand this through my textbook.
thank you so much. After I read book i couldnt still figured it out. Now i got it. i dont like when my teacher explained to me with the formula.
+Sachka Gana I'm glad it clicked! It's probably the most confusing way to calculate depreciation. Have a great winter break :)
Thank you for this video! It's really helpful and easy to understand.
Thank you so much for the clear and concise explanation.
Explained better than four years of college and thousands of dollars of debt lol
Very clear explanation -thanks!
Happy to help!
Take the lowest number (1) add the highest (5), divide the sum by 2 and multiply by 5 and you get your denominator, nice to know when you have large numbers
You already know you're amazing.
Great video! Thank you!
Happy to help! Take care & best wishes :)
excellent video...u explained it very nicely sir..
@edspira
Thanks for such an easy explanation of SOYD method.
Explain it so well! Thank you. :)
great video
what do you do when you have a partial year? like if you use this method but its in october and you need to do 3/12 for the end of year, using this method?
Equipment was purchased for R460, 000 with an estimated life of 10 years and a residual value of R19, 000. What is the depreciation expense for the first 5 years using each of the following separate depreciation methods?
a. Double-declining balance (15)
b. Sum of the years’ digits
this one is different please help
Thanks for the great example!
How does this change if the asset was not bought at the beginning of the 1st year? e.g. The asset is purchased in June and the year-end is Dec 31, do we still depreciate the entire year?
Answer: You include the months in the remaining life column. So if you only had the assets for 6 months in the first year then the second year's remaining life would be 4.5
Thank you it's such great help!
No problem!
Keeep it upp sir great ♥️♥️
Thank helped me a lot
Thanks, always appreciated.
Question. If I bought a machinery on Jan 01, 2019 with useful life of 5 years and without any salvage value and on Jan 01, 2020 the entity estimated that the machinery has a salvage value of 200k. How do I compute for the depreciation in 2020? (the entity uses syd.)
This is a change in accounting estimate. You simply recalculate the new depreciation expense based on the new terms and use that number going forward. So, you take the book value in 2020 (Cost - Accum. Depreciation), and calculate syd depreciation based on 4 years remaining useful life and a $200k salvage value. You don't have to change the prior period, you just recalculate depreciation going forward. If the estimate changes again in the future you do the same, recalculate the depreciation based on the new terms. One thing I should warn is when recalculating depreciation, remember you use the REMAINING useful life, not the same useful life of 5 you used when you first bought the asset.
Is this the same as diminishing balance method?
Thanks man
Thank you! This really helped :)
What if the depreciation is 2 years total how would that factor out?
If useful life is 10 yrs then any shortcut formulla to derive fraction. Then first year would be 10/55 , second year 9/55 so. On.. ?
Question: What if the asset was acquired during the year? Like in May? How would computation change?
If I bought an equipment for 1M, 10years of useful life without any salvage value on May 01, 2019. The depreciation in Dec. 2019 is
1M x 10/55 x 8/12
The depreciation on 2020 is
1M x 10/55 x 4/12
1M x 9/55 x 8/12
I was just sitting and listening to the video and a sudden realization struck me. Who the heck pays 50k for a Pizza oven?Just a thought. Haha
Thanks for the video tho!! Very simple and understandable. Now im also wondering why i waste time and money on a classroom when a free online videos can do better.
Ha! I'm glad you were amused by this. Thanks for the compliments and best of luck to you in your studies!
Great ....sir
WOW thank you!
thank you!
Really like the Channel thx ;)
First of all thank you great explanation.second I can’t understand why using life is 1+2+3…+5 =15y not 5y???😭
Was dissapointing that you cut your video short at end. that 5th year is important to understand how it is 5000 minimum. Now I have to watch another video somewhere
manythanks
Sure thing!
Hy sir can I ask some questions I am consufed here
This doesn't seem counter-intuitive at all...at least to me it seems to be the better of the three methods...Great explanation.
Cosenza Ltd acquired a tractor with a cost of $250 000, an estimated useful life of 6 years and
a residual value of $30 000. Sum-of-years-digits depreciation was used. Ignore GST.
Required
(a) Prepare the journal entries for each of the following independent events:
i. Sell the tractor for cash of $120 000 after 2 years of use.
ii. Trade in the tractor for a $40 000 allowance after 4 years on another tractor with a cash
price of $275 000.
iii. Scrap the tractor after 5 years of use. The tractor was given to a scrap dealer who pays
$2000 to remove it.
Can someone help with this question. Followed the video but I cant get the solution answer
(a)
i. Cash at Bank 120 000
Proceeds from Sale of Tractor 120 000
Sale of tractor.
Carrying Amount of Tractor Sold 134 762
Accumulated Depreciation - Tractor 115 238
Tractor 250 000
Recognition of expense of tractor sold.
EDIT: Got the answer, just had to add years 1 and 2 depreciation together for accumulated depreciation debit
sounds like Professor Leblanc
wish i found your channel earlier im literally watching this for my final final exam 😭