446A Used Cars Retail - Certified/CarBravo

Sales

Used Vehicle Department

Sales Synopsis

This account is established to record the sale of GM Certified Used Cars or CarBravo Used Cars sold at retail to end-users.  (Certified Cars for Other manufacturers are recorded in Account 446B, Used Cars Retail - Other).

Debits

Credits

 

  1. Actual selling price of GM Certified Used Cars sold to retail customers

 

646A Used Cars Retail - Certified/CarBravo

Cost of Sales

Used Vehicle Department

Cost of Sales Synopsis

This account is established to record the Cost of Sales for vehicles sold in the above account (Account 446A, Used Cars Retail - Certified/CarBravo)

Debits

Credits

  1. Inventory value, LESS reconditioning, of Certified Used Cars sold to retail customers

  1. Credits received from the factory for sales to General Motors Employees under the GM Employee Purchase Plan

 

Example 1

Record a Certified Used Car sale in the amount of $32,695.  The sales tax is $2,633 and the Documentation Fees are $225.  The inventory value is $30,195 of which $1,400 is due to Reconditioning.

Journal: Used Car Sales

Entry:

 

Debit

Credit

Account 220A

Accounts Receivable – Customer – Vehicles

$35,553

 

Account 646A

Cost of Sales – Used Car Retail – Certified

$28,795

 

Account 647A

Reconditioning – Cert. Used Cars

$1,400

 

Account 240

Inventory – Used Cars

 

$30,195

Account 446A

Sales – Used Cars Retail – Certified

 

$32,695

Account 324A

Sales Taxes Payable – Excise Taxes

 

$2,635

Account 910

Document Handling Fees

 

$225

Comments

As Used Cars are acquired, a timely determination must be made as to whether the Used Car is eligible to be sold under the GM Certified or CarBravo programs.  If the vehicle is eligible, then it must be reconditioned according to program rules and promptly Certified.  When the Certified Used Car is sold at retail, the sale and cost of sales are recorded in these accounts.