443 GM Protection Plans New Vehicles (Sales)

Finance & Insurance Activity

New Vehicle

Sales Synopsis

Account 443 is established to record the Sales of GM Protection Plans by the F & I Department on New Vehicles.

Debits

Credits

  1. Chargebacks due to early termination

 

  1. The selling price of GM Protection Plans sold on New Vehicles

 

643 GM Protection Plans New Vehicles (Cost of Sales)

Finance & Insurance Activity

New Vehicle

Cost of Sales Synopsis

Account 643 is established to record the Cost of Sales of GM Protection Plans by the F & I Department on New Vehicles.

Debits

Credits

  1. The Cost of Sales of GM Protection Plans

 

 

Example 1

Record a new vehicle sale for the amount of $17,871 with a finance contract reserve of $300, a GM Protection Plan of $1,570, sales tax of $893, insurance commissions earned of $300 and Registration Fees of $125.  The inventory value is $16,421 and the cost of the GM Protection Plan is $1,020 and the cost of the supplemental insurance is $150.

Journal: New Vehicle Sales

Entry:

 

Debit

Credit

Account 205

Contracts in Transit

$20,759

 

Account 262

Due from Finance Companies

$300

 

Account 600-618

Cost of Sales – New Cars - Retail

$16,421

 

Account 643

Cost of Sales – GM Protection Plans – New Cars

$1,020

 

Account 400-418

Sales – New Cars – Retail

 

$17,871

Account 443

Sales – GM Protection Plans – New Cars

 

$1,570

Account 231

New Car Inventory

 

$16,421

Account 300

Accounts Payable – Trade Creditors

 

$1,020

Account 300

Accounts Payable – Trade Creditors

 

$150

Account 324A

Sales Taxes Payable – Excise Taxes

 

$893

Account 806

Finance Income – New

 

$300

Account 807

Insurance Commissions Earned – New

 

$150

Account 910

Document Handling Fees

 

$125

Note:

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.