905 Other Income

Additions/Deductions

Addition to Income

Synopsis

Account 905 is established to record the amount of miscellaneous income received by the dealership.  Only the monies, which cannot properly be recorded in any other account, are to be posted here.

Debits

Credits

  1. Expense, including interest and depreciation, related to other investments and miscellaneous assets

  2. Amounts paid in excess of factory costs for new vehicles transferred from other dealers

  3. Expense in connection with purchasing cooperatives

  4. Expense in connection with vending machines

  1. Revenue from other investments and miscellaneous assets

  2. Amounts received in excess of factory costs for new vehicles transferred to other dealers

  3. Revenue in connection with purchasing cooperatives

  4. Revenue in connection with vending machines

  5. Dividends from securities

  6. Revenue from storage charges to customers

  7. Gains on sales of fixed assets, securities, miscellaneous assets received in trade and other investments and miscellaneous assets

  8. Interest earned on deposits in financial institutions

  9. Finance charges on customer accounts receivable

  10. Revenue from sales of scrap other than Used Vehicles

  11. Reimbursement of expenses incurred for affiliates and subsidiaries, if it cannot be applied to specific expense accounts

  12. Revenue for collecting sales tax

  13. Excess of the increase in the cash surrender value over the premium paid on life insurance policies owned by the dealership

  14. Revenue for collecting waste management fees (Federal and State)

  15. Other non-operating income for which no provision has been made

Example 1

Record $85 of income from vending machines.

Journal: Cash Receipts

Entry:

 

Debit

Credit

Account 201

Cash on Hand

$85

 

Account 905

Other Income

 

$85

Example 2

Record the $17,043 purchase of a new car from another dealer.  The new car inventory value is $16,168, $525 Holdback, $175 LAM dealer contribution and the $175 LAM group contribution are to be recorded as debits to account 905.

Journal: Cash Disbursement

Entry:

 

Debit

Credit

Account 231

Inventory - New Cars

$16,168

 

Account 905

Other Income (Holdback)

$525

 

Account 905

Other Income (LAM Dealer Contribution)

$175

 

Account 905

Other Income (LAM Group Contribution)

$175

 

Account 202

Cash in Bank

 

$17,043

Example 3

Record the annual increase in the cash surrender value of the life insurance policy owned by the dealership.

Journal: General Journal

Entry:

 

Debit

Credit

Account 291

Life Insurance - Cash Value

$635

 

Account 905

Other Income

 

$635