021 Salaries – Supervision
Expenses
Personnel
Synopsis
The compensation paid to managers and other supervisory personnel is recorded in Account 021, Salaries – Supervision. Not included are incentives, spiffs and commissions, which are properly posted to Account 026, Incentives - Supervision.
Debits |
Credits |
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Example 1
Record the $2,000 salary paid to parts manager of which $700 is payroll taxes, and a $150 payroll deduction for partial repayment of a loan.
Journal: Payroll
Entry: |
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Debit |
Credit |
Account 021-07 |
Salaries – Supervision – Parts & Accessories |
$2,000 |
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Account 025-07 |
Payroll Taxes – Parts & Accessories Department |
$153 |
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Account 321 |
Salaries, Wages & Commissions Payable |
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$1,303 |
Account 294 |
Notes and Accounts Receivable – Other |
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$150 |
Account 323 |
Payroll Taxes Payable |
|
$700 |
Distribution of Expenses
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Departmental Distribution |
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021 Salaries Supervision |
New Veh. |
Used Veh. |
Lease & Rental |
Mechanical |
Body Shop |
Parts & Access. |
Gen & Admin. |
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01 |
02 |
03 |
05 |
06 |
07 |
09 |
Compensation of the general manager |
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Total compensation |
Compensation of the business manager |
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Total compensation |
Compensation of the lease and rental department manager |
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Total compensation |
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Compensation of the parts and accessories department manager |
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Total compensation |
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Compensation of the combination general manager and new vehicle department manager |
Time |
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Time |
Compensation of the service department manager or body shop manager |
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Time |
Time |
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Comments
As indicated in the Expense Distribution chart above, each Supervisor’s compensation should be debited to the respective Department. In the case where a manager oversees two (2) or more Departments, then the compensation should be pro rated and proportionately charged to each respective Department. Compensation plans for Supervisors should contain incentives for controlling expenses and producing profit (see Account 026, Incentives - Supervision).
Note:
Job Descriptions should be prepared for each position. Periodic reviews should be conducted to discuss job performance and to set goals for the future.
Transactions, which are related, should be recorded in separate sub-accounts. Sub-accounts serve to keep records organized for future analysis and auditing. The sub-accounts in these examples are designated by a letter following the account number (suffix). Please refer to your DSP's instructions for establishing sub-accounts.