420 New Cars - Fleet

Sales

New Vehicle Department

Sales Synopsis

New Cars, which are sold to qualified Fleet customers, are recorded in this account.

Debits

Credits

 

  1. Actual selling price of new cars sold to fleet customers

 

620 New Cars - Fleet

Cost of Sales

New Vehicle Department

Cost of Sales Synopsis

The inventory values of the New Cars, sold in the above account, are recorded in this Cost of Sale account.

Debits

Credits

  1. Cost of new cars sold to fleet customers

 

  1. Fleet incentive credits

 

Example 1

Record the sale of a new vehicle for the amount of $17,071 to a Fleet customer.  The sales tax is $854 and the  Registration Fees are $125.  The inventory value is $16,721.

Journal: New Car Sales

Entry:

 

Debit

Credit

Account 220A

Accounts Receivable – Customer – Vehicles

$18,050

 

Account 620

Cost of Sales – New Cars – Fleet

$16,721

 

Account 420

Sales – New Cars – Fleet

 

$17,071

Account 231

New Car Inventory

 

$16,721

Account 324A

Sales Taxes Payable – Excise Taxes

 

$854

Account 910

Document Handling Fees

 

$125

Example 2

Record a fleet incentive of $500 due on the above new vehicle sale.

Journal: New Car Sales and General Journal

Entry:

 

Debit

Credit

Account 261

Factory Receivables – Fleet Incentives

$500

 

Account 620

Cost of Sales – New Cars – Fleet

 

$500

Comments

The Fleet Sales for each respective Division should be recorded as indicated in the table below:

Account

(A)

(B)

(C)

(D)

(E)

(H)

(J)

420/620

Chevrolet

Pontiac

Oldsmobile

Buick

Cadillac

Saturn

Other Non-GM

Note:

Incentives from GM offered as assistance for making Fleet Sales should be credited to Account 620, New Cars - Fleet (Cost of Sales), which has the effect of reducing the cost of sale.  The off-setting debit is recorded to Account 261, Factory Receivables.