064 Advertising Rebates
Expenses
Semi-Fixed
Synopsis
Account 064, Advertising Rebates is established to record monies and credits given to the dealership by manufactures, suppliers and agencies for advertising purchased.
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Debits |
Credits |
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Example 1
Record the $20,000 received for the GM Dealer Co-Op Advertising Program. The credit is distributed to each department based on usage as shown in the example below.
Journal: Purchase
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Entry: |
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Debit |
Credit |
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Account 300 |
Accounts Payable – Trade Creditors |
$20,000 |
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Account 064-01 |
Advertising Rebates – New Vehicles Department |
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$10,000 |
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Account 064-03 |
Advertising Rebates – Lease & Rental Department |
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$2,000 |
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Account 064-05 |
Advertising Rebates – Mechanical Department |
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$5,000 |
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Account 064-07 |
Advertising Rebates – Parts & Accessories Department |
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$3,000 |
Distribution of Expenses
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Departmental Distribution |
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064 Advertising Rebates |
New Veh. |
Used Veh. |
Lease & Rental |
Mechanical |
Body Shop |
Parts & Access. |
Gen & Admin. |
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01 |
02 |
03 |
05 |
06 |
07 |
09 |
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Rebates Received from Manufacturer |
(Credit) based on Usage |
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(Credit) based on Usage |
(Credit) based on Usage |
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(Credit) based on Usage |
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Advertising Credits Received |
(Credit) based on Usage |
(Credit) based on Usage |
(Credit) based on Usage |
(Credit) based on Usage |
(Credit) based on Usage |
(Credit) based on Usage |
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Comments
As part of special marketing and promotional plans, the manufacturer will reimburse the dealership for a portion of the local advertising costs. These payments are credited to this account. Some TV, radio and newspaper advertising departments offer Advertising discounts by means of credits against future advertising costs. When this is the case, such credits are posted to this account.
The Rebates should be pro-rated to each respective department based on the amount of the expenditure that generated the credits.