715 Policy-Leased Vehicles (Closed End Lease)
725 Policy-Leased Vehicles (Open End Lease)
735 Policy-Leased Vehicles (Rental)
Lease & Rental Activity
Direct Cost
Cost of Sales Synopsis
Accounts 715, 725, and 735, Policy (adjustments) for Closed End Lease, Open End Lease and Rental vehicles, respectively are established to record the cost of performing repairs to Lease and Rental vehicles for which the customer is not charged.
Debits |
Credits |
|
|
Example 1
Record the $43 of mechanical repairs to a lease unit not covered by warranty or a maintenance agreement and not chargeable to the lessee. The labor sale is $43 and the cost of labor is $13.
Journal: Internal Sales
Entry: |
|
Debit |
Credit |
Account 715 |
Direct Cost – Policy – Leased Vehicles – Close End Lease |
$43 |
|
Account 663 |
Cost of Sales – Internal Labor - Mechanical |
$13 |
|
Account 247A |
Inventory – Work in Process |
|
$13 |
Account 463 |
Sales – Internal Labor – Mechanical |
|
$43 |
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.