716 Maintenance & Repairs (Closed End Lease)

726 Maintenance & Repairs (Open End Lease)

736 Maintenance & Repairs (Rental)

Lease & Rental Activity

Direct Cost

Cost of Sales Synopsis

Accounts 716, 726, and 736, Maintenance & Repairs for Closed End Lease, Open End Lease and Rental vehicles, respectively are established to record the cost of performing routine Maintenance and Repairs on Lease and Rental Vehicles.

Debits

Credits

  1. The Internal selling price of Labor & Materials used in maintaining and repairing Lease and Rental vehicles

 

 

Example 1

Record a $402 repair order for mechanical work performed on a rental unit.  The internal labor sale is $160.  The parts sale is $210.  The sales tax is $12 and the shop supplies are $20.  The cost of labor is $50.  The parts cost is $158 and the shop supplies cost is $15.

Journal: Internal Sales

Entry:

 

Debit

Credit

Account 736

Direct Cost – Maintenance & Repairs (Rental)

$402

 

Account 663

Cost of Sales – Internal Labor – Mechanical

$50

 

Account 669

Cost of Sales – Shop Supplies

$15

 

Account 681

Cost of Sales – Parts - Internal

$158

 

Account 242

Inventory – Parts & Accessories

 

$158

Account 242

Inventory – Parts & Accessories

 

$15

Account 247A

Inventory – Work in Process – Mechanical

 

$50

Account 324

Sales Taxes Payable

 

$12

Account 463

Sales – Internal Labor - Mechanical

 

$160

Account 469

Sales – Shop Supplies

 

$20

Account 481

Sales – Parts – Internal

 

$210

 

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.