462 Warranty Claim Labor - Mechanical.htm

462 Warranty Claim Labor - Mechanical

Sales

Fixed Operations

Sales Synopsis

The purpose of this account is to record Warranty Claim Labor Sales performed by the Mechanical Department.

Debits

Credits

Actual selling price (at claim rate) of mechanical labor for which warranty and transportation claims are filed

662 Warranty Claim Labor - Mechanical

Cost of Sales

Fixed Operations

Cost of Sales Synopsis

Account 662 is established to record the Cost of Sales, which is defined as compensation paid to technicians for Warranty Claim repairs.

Debits

Credits

Cost of mechanical labor for which warranty and transportation claims are filed

Example 1

Record a warranty repair order for a mechanical customer’s car in the amount of $755. The warranty claim labor is $170. The warranty parts sale is $585. The cost of labor is $50 and the parts cost is $450.

Journal: Warranty Sales

Entry:		Debit	Credit
Account 263	Accounts Receivables – Warranty Claims	$755
Account 662	Cost of Sales – Warranty Claim Labor – Mechanical	$50
Account 680	Cost of Sales – Parts – Warranty Claims	$450
Account 242	Inventory – Parts & Accessories		$450
Account 247A	Inventory – Work in Process – Mechanical		$50
Account 462	Sales – Warranty Claim Labor – Mechanical		$170
Account 480	Sales – Parts – Warranty Claims		$585

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.