283 Parts and Accessories Equipment

Assets

Fixed

Synopsis

Account 283 is established to record the acquisition cost of Parts & Accessories Equipment purchased by the dealership and used in the automobile business.

Debits

Credits

  1. The Cost of Parts and Accessories equipment acquired

  2. The Cost of Parts and Accessories equipment built

 

  1. The Cost of Parts and Accessories equipment sold and otherwise disposed of

 

Example 1

Record the purchase of a display case in the amount of $800.

Journal: Cash Disbursements and Purchase

Entry:

 

Debit

Credit

Account 283

Parts & Accessories Equipment

$800

 

Account 300

Accounts Payable – Trade Creditors

 

$800

Example 2

Record the sale of parts bins no longer used in the amount of $350. The Accumulated Depreciation for the parts bins is $3,750.

Journal: Cash Receipts

Entry:

 

Debit

Credit

Account 201

Cash on Hand

$350

 

Account 353

Accumulated Depreciation – Parts & Accessories Equipment

$3,750

 

Account 283

Parts & Accessories Equipment

 

$3,750

Account 905

Other Income

 

$350

Comments

A debit balance represents the cost of equipment acquired and built for use in the parts and accessories department. This includes items of a movable nature, not a permanent part of the building, such as:

 

a.      Cabinets

b.      Containers

c.      Counters

d.      Parts bins

e.      Shelves

f.        Showcases

Note:

ONLY ASSETS USED IN THE OPERATION OF THE DEALERSHIP BUSINESS SHOULD BE INCLUDED IN THESE ACCOUNTS.

 

Cost of assets should include additional items such as:

 

  1. Expenses incidental to securing title
  2. Installation and construction costs, including interest during construction
  3. Accessories and optional equipment
  4. Freight
  5. Sales Tax