494 Divisional Extended Warranties (Sales)
Sales; Finance & Insurance Activity
New Vehicle Department
Sales Synopsis
The sales of Divisional Extended Warranties are recorded in Accounts 494A, 494D, 494E, & 494F. These accounts are shown on each of the divisional pages of the operating report. The totals of all these accounts are summed into account 494 that is shown on page 7 in the Finance, Insurance & Protection Plan Activity section.
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Debits |
Credits |
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694 Divisional Extended Warranties (Cost of Sales)
Sales; Finance & Insurance Activity
New Vehicle Department
Cost of Sales Synopsis
The Cost of Sales from Divisional Extended Warranties are recorded in Accounts 694A, 694D, 694E, & 694F. The sales and gross profit is shown on each of the divisional pages of the operating report. The totals of all these accounts are summed into account 694 that is shown on page 7 in the Finance, Insurance & Protection Plan Activity section.
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Debits |
Credits |
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Example 1
Record a new vehicles sale for the amount of $17,871 with a GM Divisional Extended Warranty of $1,570, sales tax of $893, finance commissions earned of $300 and Document Handling Fees of $125. The inventory value is $16,421 and the cost of the GM Divisional Extended Warranty is $1,020.
Journal: New Vehicle Sales
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Entry: |
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Debit |
Credit |
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Account 205 |
Contracts in Transit |
$20,459 |
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Account 262 |
Due from Finance Companies |
$300 |
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Account 600-618 |
Cost of Sales - New Cars - Retail |
$16,421 |
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Account 694A |
Cost of Sales - Divisional Extended Warranties |
$1,020 |
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Account 400-418 |
Sales - New Cars - Retail |
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$17,871 |
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Account 494A |
Sales - Divisional Extended Warranties |
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$1,570 |
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Account 231 |
Inventory - New Cars |
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$16,421 |
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Account 300 |
Accounts Payable – Trade Creditors |
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$1,020 |
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Account 324A |
Sales Taxes Payable – Excise Taxes |
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$893 |
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Account 806 |
Finance Income - New |
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$300 |
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Account 910 |
Document Handling Fees |
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$125 |