Thank you so much for the kind words! I'm so glad you found the videos helpful. I hope your life and career are going well, and that you achieve all of your hopes and dreams!
I’ve spent hours trying to look for the way to solve accumulated depreciation and no articles online show how!! They only show how to find the expense. Thank you soooo much!!!
Thanks soooo much!!!! Your step by step instructions are EVERYTHING!!!!! No one breaks anything down anymore they just assume you know. I was about to drop out of my accounting class and this is my SECOND time taking the class. I couldn’t understand the first time NO one helped. I wish I found this first. Thank you Jesus!!!!!
Wow I’m 3 days away from taking my first attempt at the FAR CPA and I’ve watched so many videos of you that are really aiding my review! Thank you!!! I watched most of your inventory videos, all those were great as well. Your use of different colors as you explain concepts is much appreciated for us visual learners! And you hit a lot of cpa talk points.. not sure if that’s on purpose. I’m going to just keep on watching all your videos before I take this exam!
I cant begin to thank you for how much help you've given me. You are the only channel where I can find help with almost every accounting concept thus far in my degree.
Thank you! This helped more than my text book. I wasn't sure what to do if after the calculated years ended with more than the salvage value, so glad you explained that.
thank you! i always had trouble understanding the calculation of the rate (what it is, why it's needed, etc.). this is the only time i've ever understood both the method and the underlying reasoning at the same time!
Thank you so much for explaining this so clearly!! Taking ATCG 102 for my last semester of college and tbh this was one formula I wasn't understanding very well, now I do thanks to this video. This channel rocks!! =)
+David C He said never mind the SV for now, and plus it does not change the %. and as he mentioned it does not have to be exact the double of straight line! it could be triple!
+gracegirl14 lol didn't bother to listen at all he said ignore the sv because if you do you assume it to be zero and there for he is right 50k/5yr, he is teaching hence why he is keeping it as simple as he can
You're right. Declining balance method ignores salvage value in the initial calculation and then adjusts the last depreciation calculation to bring the book value equal to salvage value.
Well explained sir, but could you please help me understand on how you're getting Deprecation expense for the last year, that's the only part I want to know
I have a quick question, I saw online that DDB is also known as Reducing balance method, which is the same as Diminishing balance method, is this true or was I mistaken?
Thank you this was helpful BUT the the straightline example very conveniently used as an example a purchase made on January 1. So at the end of the year you get the full year. What about if the purchase was made months into the year? Do you have to account for that somehow?
It is possible to calculate the Double declining rate much faster and easier though! Instead of first calculating the Single declining rate and double that, you can also devide 1 / by useful life x 2. (the 1 meaning 100% and the uselife life measured in years) In your example you would get (1/ 5) x 2 x 50.000 = 20.000 which is easily typed in your calculator at once:) Thanks for your explanation though!!!
Hi! Thank u this vid rlly helped me a lot. was wondering what if the book value was actually HIGHER than the estimated salvage value? Do we do the same process or we leave it alone. Thanks! Appreciate a reply..thanks
So of the straight line, double declining and sum of the year digits, double declining balance is the only one where you update the cost every 12 months?
There is no formula for salvage value. The company has to estimate what they think the asset will be worth at the end of its useful life. If it's difficult to determine a salvage value, or if the salvage value is expected to be minimal, then it isn't necessary to include a salvage value in depreciation calculations. Instead, you'd simply depreciate the entire cost of the asset over its useful life. Any proceeds from the sale of the asset would then be recorded as a gain.
On January 1, 2015, Hydri Construction acquired a small excavator for $.85,000. This device had a 4-year service life. It is expected that the equipment will be sold for $.10,000 salvage value at the end of 4 years. The company uses the double-declining balance depreciation method required; Prepare a schedule showing annual depreciation expense, accumulated depreciation
Well and good from an annual period standpoint, but most companies produce monthly or quarterly financials, for both internal and external users. How is the DDB calculation done for interim accounting periods, like monthly? I worked the table, using 60 (5 x 12) for the accounting periods, and the result was quite different.
Just always divide by the useful life in terms of reporting periods. If the useful life is two years but reported on a monthly basis, that's 24 reporting periods. If reported on a yearly basis it's just 2 periods.
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
The salvage value wasn't calculated. Salvage value is what the company estimates the pizza oven's resale value will be after it's useful life of 5 years has passed. If you are taking a course, the salvage value will always be given. If the problem doesn't list a salvage value, then you can assume it to be $0. However, in real life managers/accountants must estimate this value.
Hi could I use this to calculate that : a company acquired a machine on 01.01.2013 at cost of 130,000 and spent 2,000 on its installations and 3,000 on trasport. Life of the machienry is 10 years. The company uses the declining balance method of depreciation for machinery at 30% a year. the books of accounts are closed on the 31st december every year. what will be the depreciation charge for the year 2015(year 3)? a)19,845 b)28,350 c)13,500 d)88,695 e) none of above answers is correct
This is Single declining balance, as the S-L Rate is 1/n. Were this a double declining balance problem, the S-L Rate would have been 2/n = 40%. This is a major overlook.
Great video thanks.... I had to watch this last minute and was able to understand it easily.... Wondering if I should steal you as a professor... Thanks again
You did straight line depreciation wrong because the salvage value is 4,000. So you would subtract that from the 50,000 then divide by 5. To get the annual depreciation
Um... why isit when you calculate double declining in the 5th year you suddenly care about the salvage value but when you calculate the straight line you completely ignore the salvage value? This is weird. Ignoring salvage value will affect the straight line and double declining depreciation amount, and theres no reason to suddenly care about salvage value only in the 5th year of the double declining
Your content is criminally underrated. Thanks for all you do for so many!
Thank you so much for the kind words! I'm so glad you found the videos helpful. I hope your life and career are going well, and that you achieve all of your hopes and dreams!
i would've failed legit without this guy
I’m going to tell my kids that you were the man who helped me pass my first semester in college and therefore graduate college.
this man is a straight homie and I would’ve failed accounting without him
This video way more helpful than my shitty WileyPlus textbook
Wiley is so shit!
bro i hate wiley
and we gotta pay for that shit
I’ve spent hours trying to look for the way to solve accumulated depreciation and no articles online show how!! They only show how to find the expense. Thank you soooo much!!!
Thanks soooo much!!!! Your step by step instructions are EVERYTHING!!!!! No one breaks anything down anymore they just assume you know. I was about to drop out of my accounting class and this is my SECOND time taking the class. I couldn’t understand the first time NO one helped. I wish I found this first. Thank you Jesus!!!!!
After an hour of trying to figure this out for my online class Here i am at 5am ! This was clutch 🙌..... now i can finally sleep..... Thank you
Wow I’m 3 days away from taking my first attempt at the FAR CPA and I’ve watched so many videos of you that are really aiding my review! Thank you!!! I watched most of your inventory videos, all those were great as well. Your use of different colors as you explain concepts is much appreciated for us visual learners! And you hit a lot of cpa talk points.. not sure if that’s on purpose. I’m going to just keep on watching all your videos before I take this exam!
No problem, I hope you ace the exam!
Someone give this guy, some type of award for helping students
I cant begin to thank you for how much help you've given me. You are the only channel where I can find help with almost every accounting concept thus far in my degree.
truthfully, for me your method has been deemed favorable! Easiest and least confusing video I've found on this subject. Thanks!!!!!
EDSPIRA the man the myth the legend
😂
Your videos are extremely helpful dude
Thank you! This helped more than my text book. I wasn't sure what to do if after the calculated years ended with more than the salvage value, so glad you explained that.
+Debbie Jean Whittington I'm glad the video helped! Some textbooks only serve to increase confusion :)
thank you! i always had trouble understanding the calculation of the rate (what it is, why it's needed, etc.). this is the only time i've ever understood both the method and the underlying reasoning at the same time!
Your explanation was awesome! I love how you made it possible for me to pull it all together. Thank you for this tutorial.
watching this minutes before i have to take my accounting exam. thank you so much for this!
Thank you so much for explaining this so clearly!! Taking ATCG 102 for my last semester of college and tbh this was one formula I wasn't understanding very well, now I do thanks to this video. This channel rocks!! =)
Imagine a free TH-cam video explains it better than a professor which I paid $20,000 per semester to attend. Down bad.
Amazing! Thanks God that world has people like you. Thanks!
Super interesting. I love how creative the accounting can get with depreciation.
legit the best explanation for DDB method i found on youtube!
I don't know who you are, but you are helping me with accounting. I appreciate the videos.
this is so much easier than whatever my textbook was telling me to do
thank you so much
You just saved my goodnight sleep.It was extremely helpful brother.
Glad I could help!
Thanks for helping me prepare for my exam.
Isn't Straight line formula (50,000-4,000)/5?
+David C I noticed that too.
+David C He said never mind the SV for now, and plus it does not change the %. and as he mentioned it does not have to be exact the double of straight line! it could be triple!
+gracegirl14 lol didn't bother to listen at all he said ignore the sv because if you do you assume it to be zero and there for he is right 50k/5yr, he is teaching hence why he is keeping it as simple as he can
+David C Yup that's what I know
You're right. Declining balance method ignores salvage value in the initial calculation and then adjusts the last depreciation calculation to bring the book value equal to salvage value.
You are awesome. Your explanations are easy to follow.
Glad you like them!
Thank you very much from France, maybe i'll pass my exams thanks to you :)
How did you determine the capped value of 2,480?
Best video that gives good examples and explanations. Thanks!!!!
you make accounting simple and easy to grasp!! thank you!!
Well explained sir, but could you please help me understand on how you're getting Deprecation expense for the last year, that's the only part I want to know
Thank you so much, this’ll help me with my exam.
thanks sir , this lecture is so helpful to me
Thank you for explaining the Double Declining method. Your video was very easy to understand and helpful.
Perfect great! now i fully understand about Sum of the Year Digit. Thanks professor!
I have a quick question, I saw online that DDB is also known as Reducing balance method, which is the same as Diminishing balance method, is this true or was I mistaken?
Thank you this was helpful BUT the the straightline example very conveniently used as an example a purchase made on January 1. So at the end of the year you get the full year. What about if the purchase was made months into the year? Do you have to account for that somehow?
Just divide the depreciation value that year by the number of months? Like if one year the depreciation is 10000 then half year is 5000...
This channel always help me on my accounting subjects. Ill definitely follow this
It is possible to calculate the Double declining rate much faster and easier though! Instead of first calculating the Single declining rate and double that, you can also devide 1 / by useful life x 2. (the 1 meaning 100% and the uselife life measured in years)
In your example you would get (1/ 5) x 2 x 50.000 = 20.000 which is easily typed in your calculator at once:) Thanks for your explanation though!!!
Not all hero’s wear capes. Thank you!!
thank you Prof. B. Leblanc
Hi! Thank u this vid rlly helped me a lot. was wondering what if the book value was actually HIGHER than the estimated salvage value? Do we do the same process or we leave it alone. Thanks!
Appreciate a reply..thanks
Very clear tutorial, thanks a lot!
Thanks for watching Li!
Thanks a ton this is extremely helpful!
Glad it was helpful!
u just saved my life homie
😀
Can i ask if a question state expenses ,do the beg bv just use cost or use coa,which is cost price + other expenses
When rate of depreciation is given in the question for double declining method so whether to use it or calculate as you calculate
So of the straight line, double declining and sum of the year digits, double declining balance is the only one where you update the cost every 12 months?
for finding the straight-line rate shouldn't it be (50000-4000)/(5*50000) *100 =18.4% ?
Is the salvage value always given?? Or is there any specific formula to get it?? Thanks in advance
There is no formula for salvage value. The company has to estimate what they think the asset will be worth at the end of its useful life. If it's difficult to determine a salvage value, or if the salvage value is expected to be minimal, then it isn't necessary to include a salvage value in depreciation calculations. Instead, you'd simply depreciate the entire cost of the asset over its useful life. Any proceeds from the sale of the asset would then be recorded as a gain.
@@Edspira woah!!! that was fast!!!! Thanks man!! Really appreciate it!!! 👌👊👊👊👌
On January 1, 2015, Hydri Construction acquired a small excavator for $.85,000. This device
had a 4-year service life. It is expected that the equipment will be sold for $.10,000 salvage
value at the end of 4 years. The company uses the double-declining balance depreciation method
required; Prepare a schedule showing annual depreciation expense, accumulated depreciation
Yes, this is explained very well, thank you!
What type of business use this methods ?
Assuming we would have Salvage value of (0), can we apply the IRR formula and substracting the rate out of the begining value of each year ?
Super thanks from South Korea
Thank you! Very clear and well explained!
Well and good from an annual period standpoint, but most companies produce monthly or quarterly financials, for both internal and external users. How is the DDB calculation done for interim accounting periods, like monthly? I worked the table, using 60 (5 x 12) for the accounting periods, and the result was quite different.
Thank you so much, your videos are extremely helpful!!
thank you so much for this. helped out alot
Is double declining and declining balance method the same?
how do you do this on a vehicle that has an interest rate that is steep. Do you add that into the original cost?
Thank you for the tutorial, sir.
What if the depreciation is monthly based instead of yearly depreciation?
Just always divide by the useful life in terms of reporting periods. If the useful life is two years but reported on a monthly basis, that's 24 reporting periods. If reported on a yearly basis it's just 2 periods.
I got lost at the end. Where did you get 6480?
This really helped me !!! Thanks!!!
Thanks for uploading such a helpful video
what would be the journal entry ?
mary Angel debit depreciation expense, credit accumulated depreciation
big man tng here you is a king
you saved my life =((( thank you so much 😚
+Thy Pham No problem! Best wishes :)
Very Helpful, Sir! Thank You!
+Shane Buerster Sure thing! Best wishes :)
I wish this guy was my professor since mine doesn’t know how to teach
😀
Doesn't salvage value need to be included in straight-line first calculation??
In the straight line method why you did not minus the salvage value ?
the ending part is not clear can someone help with it how we took 6480 as dep exp how come it will come to 0 ? thanks in advance
so if there was no salvage value, on the fifth year, the depreciation rate will be 100% since we have to make the fourth year book value down to zero?
What about if it didn't reach nd you reached the last year with no value
how did you get the 2480 value? D:
+Eleanor Lee accountants be like
Because the residual value is 4000 so what ever is left on year 5 without going below 4000 is the depreciation for that final year
6480-4000
Really helpful ❤
Awesome video man! thanks so much
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
How did u get 2480?
How did you find the salvage value?
The salvage value wasn't calculated. Salvage value is what the company estimates the pizza oven's resale value will be after it's useful life of 5 years has passed. If you are taking a course, the salvage value will always be given. If the problem doesn't list a salvage value, then you can assume it to be $0. However, in real life managers/accountants must estimate this value.
Hi could I use this to calculate that : a company acquired a machine on 01.01.2013 at cost of 130,000 and spent 2,000 on its installations and 3,000 on trasport. Life of the machienry is 10 years. The company uses the declining balance method of depreciation for machinery at 30% a year. the books of accounts are closed on the 31st december every year. what will be the depreciation charge for the year 2015(year 3)?
a)19,845
b)28,350
c)13,500
d)88,695
e) none of above answers is correct
how did you calcculate 2,480?
Simple question how will you find the double decline, when depreciation value of asset is given????
if the 5 year was 18 years am I going to do this each year for 18 years?
why did you doubled the depression rate when it was 20 percent iam a little confused?
This is Single declining balance, as the S-L Rate is 1/n. Were this a double declining balance problem, the S-L Rate would have been 2/n = 40%. This is a major overlook.
r
I found it very helpful xxx
Great video thanks.... I had to watch this last minute and was able to understand it easily.... Wondering if I should steal you as a professor... Thanks again
You did straight line depreciation wrong because the salvage value is 4,000. So you would subtract that from the 50,000 then divide by 5. To get the annual depreciation
You save me sir love you so much keep doing
thanks for ur explain ... very helpful ... :)
+Vallencia Lisa Sure thing! Best wishes :)
tnxxxx a lot... i was screwed up.....but u save me...
how you put 2480?
thank you! very helpful.
My pleasure! Good luck with your classes!
Um... why isit when you calculate double declining in the 5th year you suddenly care about the salvage value but when you calculate the straight line you completely ignore the salvage value? This is weird. Ignoring salvage value will affect the straight line and double declining depreciation amount, and theres no reason to suddenly care about salvage value only in the 5th year of the double declining
What if salvage value is 20000?