275 Driver Training Vehicles

Assets

Working

Synopsis

Account 275 is established to record the value of vehicles, which are loaned to a qualified Driver Training Schools.

Debits

Credits

  1. The factory invoice amount, less holdback and other non-related items such as supplemental advertising funds, of new vehicles placed in driver training service

  2. The Internal selling price of dealer-installed accessories and optional equipment and the labor and materials required for installation

  3. The Destination, delivery and handling charges

 

  1. The amount of factory credits applied to vehicles placed in driver training service

  2. The Cost of vehicles transferred to used vehicle inventories when taken out of service

 

Example 1

Record the transfer of a new vehicle at cost to driver training service in the amount of $16,000.

Journal: General Journal

Entry:

 

Debit

Credit

Account 275

Driver Training Vehicles

$16,000

 

Account 621

Cost of Sales - New Cars - Internal

$16,000

  

Account 231

Inventory – New Cars

  

$16,000

Account 421

Sales - New Cars - Internal

 

$16,000

Example 2

Record the accrual for the factory allowance on driver training vehicles in the amount of $400.

Journal: General Journal

Entry:

 

Debit

Credit

Account 261

Factory Receivables

$400

 

Account 275

Driver Training Vehicles

 

$400

Example 3

Record the transfer of a driver-training vehicle available for sale to the used car inventory in the amount of $11,500.

Journal: General Journal

Entry:

 

Debit

Credit

Account 240

Inventory – Used Cars

$11,500

 

Account 275

Driver Training Vehicles

 

$11,500

Comments

A debit balance represents the cost of vehicles temporarily registered in the Driver Training Program.